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econ483pracmidtermsol - 5(1 ±rst generate log values then...

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Econ 483. Applied Econometric Modeling Practice Questions for Midterm The midterm is an OPEN BOOK & NOTE exam. Feel free to bring your class notes, handouts and up to 2 books. You are NOT allowed to use your own computer. 2. (1) X 20 ° N (0 ; 1) . therefore, E [ X 20 ] = 0 . (2) summ x in 1/10 sample mean = ± : 1042242 (3) summ x in 1/100 sample mean = ± : 0688582 summ x sample mean = : 0005718 (4) because of the law of large numbers, 1 n P n i =1 x i will converge to a nonrandom number 0. 3. (1) yes, it is linear in the parameters. (2) the amount of unit increase in y due to 1 unit increase in x . (3) yes, it is linear in the parameters. (4) ° 1 unit increase in log y and 100 ° 1 % increase in y . 4. (1) from y i = b ° 0 + b ° 1 x i + b u i y = 1 n P n i =1 y i = 1 n P n i =1 ° b ° 0 + b ° 1 x i + b u i ± = b ° 0 + b ° 1 1 n P n i =1 x i + 1 n P n i =1 b u i = b ° 0 + b ° 1 x (2) subtract y = b ° 0 + b ° 1 x from y i = b ° 0 + b ° 1 x i + b u i (3) P n i =1 ( x i ± x ) b u i = P n i =1 x i b u i ± x P n i =1 b u i = 0
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Unformatted text preview: 5. (1) ±rst generate log values, then reg logrent logpop logavginc pctstu year91 (2) : 043 + 0 : 066 ² 20 + 0 : 507 ² 10 + 0 : 005 ² 6 + 0 : 003 ² . (3) 1% increase. (4) rent in year 1991 was higher than that in year 1990 by : 3% . (5) b ± + b ± 4 year 90 = b ± + b ± 4 (1 ± year 91) = ( b ± + b ± 4 ) ± b ± 4 year 91 ³ : 043 + 0 : 003 year 91 b ± = 0 : 046 , b ± 1 = 0 : 066 , b ± 4 = ± : 003 . & there was a typo in the solution to the computer lab practice 3. 3(4) should be answered like ²little is explained, so there is large possibility of discrimation³ 1...
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