Suppose wage (Y) is determined by years of schooling (yrsc) and sociability (soc) the following causal model: Y = Bo + B₁yrsc + ß₂ soc+u, where u captures all other unobservable variables and is uncorrelated with both years of schooling and sociability. Assume ß¿ > 0 for i Furthermore, assume cov(yrsc, soc) > 0. What can you conclude about the short regression model: Y = ß* + B₁yrsc + e where = 0, 1, 2.

Suppose wage (Y) is determined by years of schooling (yrsc) and sociability (soc) the following causal model: Y = Bo + B₁yrsc + ß₂ soc+u, where u captures all other unobservable variables and is uncorrelated with both years of schooling and sociability. Assume ß¿ > 0 for i Furthermore, assume cov(yrsc, soc) > 0. What can you conclude about the short regression model: Y = ß* + B₁yrsc + e where = 0, 1, 2.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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