The simple linear regression assumption 1 to 4 is needed to prove theunbiasedness of ordinary least squaresb. variance of ordinary least squaresc. expected value of μ and x is zeroall of the statements are correctd.O a. aO b. bО с. с○ d. d

Linearity: This ensures the relationship between the independent variable (X) and the dependent…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Let X1 and X2 be independent, identically distributed random variables from a population with a mean and a variance . Consider a different estimator of 1 X1 + X2 + X3 W = W is an unbiased estimator of . Is this statement true or false? Blank 1: enter "True" or "False" Blank 2: explain briefly (1-3 lines). Blank # 1 Blank # 2
ii) Suppose that you find out that you have an OLS estimator which is unbiased but has a non-minimum variance. Discuss two practical steps that you take to reduce the variance of your OLS estimator. Explain your reasoning.
Econometrics Thomas Eisensee and David Stromberg wanted to measure how much news coverage of a foreign disaster impacted the amount of disaster relief provided by the U.S. government. They argue that the simple relationship would be biased. Let X = Minutes of News Coverage and Y= Disaster Aid. Choose a variable X2 that could bias the simple relationship. This variable should impact the amount of coverage and impact the amount of aid for reasons other than purely news coverage. Eisensee and Stromberg introduce an instrument Z = During the Olympics. Explain how Z could satisfy the relevant and exogenous criteria. Explain how you could use Z to estimate the impact of X on Y free from X2 bias. Hint: you should mention two stages.
a. How to derive the variance and estimates of ols, and which steps in the derivation process require assumptions, list them.b. Under the classic OLS model. Given the R∧2 as well as the adjusted R∧2, discuss this two R-squared differences, advantages and disadvantages and their different roles.
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Consider the following formula: y i - ( β 0 ^ + β 1 ^ x i ) . What does this formula describe? OLS slope estimator Error term Causal effect of x on y residual
What is the variance of u conditional on income, var(ulinc)? Consider the following savings model: Where inc = income and sav = savings A. var(inche) B. incvar(e) C. var(sqrt(inc)) D. var(e) sav= Bo + B₁inc + u, u = √inc * e
A5
The fitted values and residuals have the following properties: a. the sample of the average of the residuals is zero b. the sample covariance between each independent variable and the OLS residual is zero c. the sample covariance between the OLS fitted value and the OLS residual is zero d. All of the above is correct ○ a. a O b. b О с. с O d. d
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The simple linear regression assumption 1 to 4 is needed to prove the unbiasedness of ordinary least squares b. variance of ordinary least squares c. expected value of μ and x is zero all of the statements are correct d. O a. a O b. b О с. с ○ d. d