Q: A classmate is interested in estimating the variance of the error term
A classmate is interested in estimating the variance of the error term in Equation (12.1). a. Suppose she uses the estimator from the second-stage regression of where X^i is the fitted value from the...
See AnswerQ: Consider TSLS estimation of the effect of a single included endogenous variable
Consider TSLS estimation of the effect of a single included endogenous variable, Xi, on Yi using one binary instrument, Zi, which takes values of either 0 or 1. Noting that show that the Wald estimato...
See AnswerQ: Consider the IV regression model Yi = 0 +
Consider the IV regression model Yi = 0 + 1Xi + 2Wi + ui, where Xi is correlated with ui and Zi is an instrument. Suppose that the first three assumptions in key concept are satisfied. Which IV ass...
See AnswerQ: Suppose a researcher is considering developing an IV regression model with one
Suppose a researcher is considering developing an IV regression model with one regressor, Xi, and one instrument, Zi. If she has a sample of n = 113, what range must the correlation coefficient be bet...
See AnswerQ: A classmate has developed an IV regression model with one regressor,
A classmate has developed an IV regression model with one regressor, Xi, and two instruments, Z1i and Z2i. She has a strong theoretical basis as to why corr (Z1i, ui) = 0, namely that Z1i is the resul...
See AnswerQ: Consider a product market with a supply function Qsi = 0
Consider a product market with a supply function Qsi = 0 + 1Pi + usi, a demand function Qdi = 0 + udi, and a market equilibrium condition Qsi = Qdi, where usi and udi are mutually independent i.i.d...
See AnswerQ: A researcher is interested in the effect of more secure property rights
A researcher is interested in the effect of more secure property rights on income across countries. He collects recent data from 60 countries and runs the OLS regression Yi = 0 + 1Xi + ui, where Yi...
See AnswerQ: Y is distributed N (10, 100) and you want
Y is distributed N (10, 100) and you want to calculate Pr (Y
See AnswerQ: How would you calculate the small class treatment effect from the results
How would you calculate the small class treatment effect from the results in Table 13.1? Can you distinguish this treatment effect from the aide treatment effect? How would you have to change the prog...
See AnswerQ: Consider the regression model with heterogeneous regression coefficients Yi =
Consider the regression model with heterogeneous regression coefficients Yi = 0 + 1iXi + vi, where (vi, Xi, 1i) are i.i.d. random variables with 1 = E (1i). a. Show that the model can be written...
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