Suppose that you wish to estimate the effect of class attendance on student performance. A basic model is examscore = β0 + β1attendance + β2priorGP A + u where examscore is students’ score on the exam (from 1 to 6), attendance is the number of TA sessions attended on Zoom (from 0 to 9), and priorGPA is the average exam grade last year. (a) Let internet be the quality of internet at the student’s study place. Do you think internet satisfies the independence assumption? What about the exclusion restriction? (b) Assuming that internet satisfies the conditions above, what other condition must internet satisfy in order to be a valid IV for attendance? (c) Suppose, we add the interaction term priorGP A × attendance. Interpret the coefficient on the interaction term. (d) (Difficult) If attendance is endogenous, then, in general, so is priorGP A × attendance. What might be a good IV for priorGP A × attendance?
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
Suppose that you wish to estimate the effect of class attendance on student performance. A basic model is
examscore = β0 + β1attendance + β2priorGP A + u where examscore is students’ score on the exam (from 1 to 6), attendance is the number of TA sessions attended on Zoom (from 0 to 9), and priorGPA is the average exam grade last year.
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(a) Let internet be the quality of internet at the student’s study place. Do you think internet satisfies the independence assumption? What about the exclusion restriction?
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(b) Assuming that internet satisfies the conditions above, what other condition must internet satisfy in order to be a valid IV for attendance?
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(c) Suppose, we add the interaction term priorGP A × attendance. Interpret the coefficient on the interaction term.
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(d) (Difficult) If attendance is endogenous, then, in general, so is priorGP A × attendance. What might be a good IV for priorGP A × attendance?
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