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Problem Set 4 Economics 103 Winter 2009 Due Tuesday, March 3, 2009 Question 1: True/False/Explain 1.If you estimate the following equation with a dummy indicating that you are a noncitizen instead of a dummy=1 if you are a citizen, you will get the same coefficients and standard errors. Y= 142 + 37 * citizen (72) (17.2) 2.In the following regression, if you divide the SAT score by 10, the coefficient will be 10 times larger and the standard error won’t change. Y= 142 + 38 * SAT (72) (17.2) 3.You have to worry about multicollinearity in the multiple regression model because OLS estimators are no longer efficient. 4.If you reject a joint null hypothesis that a group of regressors have no effect on the dependent variable using the F-test, then a series of individual t-tests will reject as well. 5.To decide whether 01iiYXuor 01ln()iiYXufits the data better, you can compare the regression 2R. 6.In the regression model 0123()iiiiiiYXDXDu, where Xis a continuous variable and Dis a binary variable, 3indicates the slope of the regression when D=1. 7.In the regression model 0123()iiiiiiYXDXDu, where Xis a continuous variable and Dis a binary variable, 2is the difference in means in Ybetween the two categories. 8.To test whether or not the regression function Yi=β0+β₁Xi+β₂Xi²+...+βpXipis linear rather than a polynomial of order p, you would use a t-test. 9.In the presence of omitted variables, OLS estimators are unbiased but inefficient. 10.When you include irrelevant variables, OLS estimators are biased.
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