The following equation describes the median housing price in a community in terms of amount of pollution (nox for nitrous oxide) and the average number of rooms in houses in the community (rooms): log(price) Bo + B₁ log(nox) + B₂rooms + μ =

The following equation describes the median housing price in a community in terms of amount of pollution (nox for nitrous oxide) and the average number of rooms in houses in the community (rooms): log(price) Bo + B₁ log(nox) + B₂rooms + μ =

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

does the simple regression of log (price) on log (nox) produce an upward or a downward biased estimator of β1?

The following equation describes the median housing price in a community in terms of amount of
pollution (nox for nitrous oxide) and the average number of rooms in houses in the community
(rooms):
log(price) Bo + P₁ log(nox) + B₂rooms + μ

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