Questions from Econometrics

Q: In Problem 2 in Chapter 4, we added the return on

In Problem 2 in Chapter 4, we added the return on the firm’s stock, ros, to a model explaining CEO salary; ros turned out to be insignificant. Now, define a dummy variable, rosneg, w...

Q: Let X denote the annual salary of university professors in the United

Let X denote the annual salary of university professors in the United States, measured in thousands of dollars. Suppose that the average salary is 52.3, with a standard deviation of 14.6. Find the mea...

Q: Consider the line y = 0 + 1x.

Consider the line y = 0 + 1x. (i) Let (x1, y1) and (x2, y2) be two points on the line. Show that (x, y) is also on the line, where x = (x1 + x2)/2 is the average of the two values and y = (y1 + y2)/...

Q: (i) Let X be a random variable taking on the

(i) Let X be a random variable taking on the values -1 and 1, each with probability 1/2. Find E(X) and E(X2). (ii) Now let X be a random variable taking on the values 1 and 2, each with probability 1/...

Q: Let Y1, Y2, Y3, and Y4 be independent,

Let Y1, Y2, Y3, and Y4 be independent, identically distributed random variables from a population with mean m and variance 2. Let Y = ¼(Y1 + Y2 + Y3 + Y4) denote the average of these four random vari...

Q: Suppose that between their first and second years in college, 400

Suppose that between their first and second years in college, 400 students are randomly selected and given a university grant to purchase a new computer. For student i, yi denotes the change in GPA fr...

Q: Let Y denote the sample average from a random sample with mean

Let Y denote the sample average from a random sample with mean m and variance 2. Consider two alternative estimators of m: W1 = [(n – 1)/n]Y and W2 = Y/2. (i) Show that W1 and W2 are both biased esti...

Q: Let Y denote a Bernoulli(() random variable with 0 < (

Let Y denote a Bernoulli(() random variable with 0 < ( < 1. Suppose we are interested in estimating the odds ratio,  = (/(1 - (), which is the probability of success over the probability of failure....

Q: The new management at a bakery claims that workers are now more

The new management at a bakery claims that workers are now more productive than they were under old management, which is why wages have “generally increased.” Let W...

Q: Suppose that a military dictator in an unnamed country holds a plebiscite

Suppose that a military dictator in an unnamed country holds a plebiscite (a yes/no vote of confidence) and claims that he was supported by 65% of the voters. A human rights group suspects foul play a...