Suppose the model pctstck = Bo + Bifunds + B2risktol + e satisfies the OLS assumptions, where pctstck is the percentage of a worker's pension invested in the stock market, funds is the number of mutual funds that the worker can choose from, and risktol is a measure of risk tolerance (larger risktol means the person has a higher risk tolerance). Suppose that funds and risktol are positively correlated. Further suppose we ran the simple linear regression pctstck = a1 + a2pctstck (a) Will â be an unbiased estimate of of the effect of pctstck? (b) If it is biased, which way will the bias push our estimate?

Suppose the model pctstck = Bo + Bifunds + B2risktol + e satisfies the OLS assumptions, where pctstck is the percentage of a worker's pension invested in the stock market, funds is the number of mutual funds that the worker can choose from, and risktol is a measure of risk tolerance (larger risktol means the person has a higher risk tolerance). Suppose that funds and risktol are positively correlated. Further suppose we ran the simple linear regression pctstck = a1 + a2pctstck (a) Will â be an unbiased estimate of of the effect of pctstck? (b) If it is biased, which way will the bias push our estimate?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.11P

See similar textbooks

Similar questions

Q13
Suppose wage (Y) is determined by years of schooling (yrsc) and sociability (soc) the following causal model: - Y = ßo + B₁yrsc + ß₂ soc+u, where u captures all other unobservable variables and is uncorrelated with both years of schooling and sociability. Assume B₁ > 0 for i 0, 1, 2. Furthermore, assume cov(yrsc, soc) > 0. What can you conclude about the short regression model: Y B + B₁yrsc+e where E(e) = 0 and cov(yrsc, e) = 0? = O B₁ =B₁ OB > B₁ There's not enough information. οβα < βι
other best example of contingency planning about turnover of employees
CENGAGE MINDTAP Ch 08: Assignment - Insuring Your Life Kate and Jon Alden are 37 years old and have one son, age 5. Kate is the primary earner, making $87,000 per year. Jon does not currently work. The Aldens have decided to use the needs analysis method to calculate the value of a life insurance policy that would provide for Jon and their son in the event of Kate's death. Kate and Jon estimate that while their son is still living at home, monthly living expenses for Jon and their child will be about $3,700 (in current dollars). After their son leaves for college in 13 years, Jon will need a monthly income of $3,100 until he retires at age 65. The Aldens estimate Jon's living expenses after 65 will only be $2,700 a month. The life expectancy of a man Jon's age is 82 years, so the Alden family calculates that Jon will spend about 17 years in retirement. Using this information, complete the first portion of the needs analysis worksheet to estimate their total living expenses. Life…
2. For this question use the HUI3 scoring system for the health utilities index. Assume a patient has a baseline HUI3 state of (2,2,1,4,1,3,2,4) and a 1-year follow-up HUI3 health state of (2,2,1,3,2,1,2,2) after participating in a RCT. How many QALYs does this person gain in the first year after treatment? a. Use the information from above to answer the following questions. Suppose the cost of treatment was $20,000 and the average person lived an additional 10 years. What is the cost per QALY gained for the treatment (using discounted QALYS)? Does the treatment appear cost-effective? Explain.
What does the term “variance analysis mean when applied of financial performance of health care organizations?
Q1. State the property of an estimator that gives a correct estimate of the population parameter of interest, but only on average. Q2. State the property of ian estimal or thal converges to the populalion paaameter of interest as the sample size goes to infinity. Q3. Why is an efficient estimator a desirable property of the OLS estimator? Q4. Stare the assumption(s)under the classical linearregression model giving rise to a biased standard error of the coefficient estimates when violated.
Suppose Bethilda earned $30,000 at her last job where she faced a 3% chance of dying on the job. Now Bathilda earns $27,000 at a new job where she faces a 2% chance of dying on the job. What is Bethilda’s implied Value of a Statistical Life? What are the uses of this measure?
V09
Isabella understands that if she were to play golf, she would be able to spend time outdoors (where she likes to be) with people she enjoys. However, because she has taken golf lessons 10+ times and still cannot hit the golf ball, she does not believe that she can actually play golf. Based on what you know about Expectancy Theory, will she join her friends to play golf this summer? Group of answer choices Yes. Instrumentality and Valence are high. No. Valence is too high. No. Expectancy is low. Yes. Instrumentality is high.
Suppose a country has 100 million inhabitants. The population can be divided into the employed, the unemployed, and the persons who are out of the labor force (OLF). In any given year, the transition probabilities among the various categories are given by Moving into: Employed Unemployed OLF Moving from: Employed Unemployed OLF 0.94 0.20 0.05 0.02 0.65 0.03 0.04 0.15 0.92 These transition probabilities are interpreted as follows. In any given year, 2 percent of the workers who are employed become unemployed; 20 percent of the workers who are unemployed find jobs, and so on. What will be the steady-state unemployment rate?
23. An education economist estimated the wage equation to determine the rate of return to an additional year of education and obtained ln(WAGE) = -0.5220+0.1075×EDUC. it is anticipated that ability ( attributes, such as intelligence, creativity, perseverance and industriousness) is positively correlated with UDUC. If a measure of a bility is omitted from the model the estimated return to education A. Is biased downwards B. Is biased upwards C. Cannot be estimated D. All the above