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MIDTERM:
Unbiasness
– if expected value of estimator = population characteristic than its unbiased
Consistency
– if the sample size becomes large, the distribution of the estimator collapses to a spike located at the true value of the dist.
Efficient
–
estimator has minimum variance
R
2
–
Greater Variation in Q but not P?
Greater variation = R
2
should fall since TSS is larger compared to ESS
Assumptions:
1)
X causes Y, Y doesn’t Cause X
2)
Correctly measured
3)
NonRedundant, Variation in X:
ERROR Ui:
T/F
1)
If there’s no variation in Dep. V. you can’t estimate slope?
FALSE, slope=0
2)If there’s no variation in Ind. V you can’t estimate slope?
TRUE, undefined 0/x
3)The VAR of error term differs across all observations in OLS called independence?
FALSE, called homoskedasticity or VAR of error term is constant
4)Supply f(x) is perf. Elastic (flat) & varies overtime. You can estimate model with P as depend. V. and Q as indp. V.?
FALSE, Q is explained by P, not visaversa.
TRUE, E(X+Y)=E(X)+E(Y)=10
Short Answer:
1)
Assume that you estimated GPA=3 + .05*Hours. Your get BMW at least a 3.5.
You hate study and use equation to study 10hrs/week. You get a 4.3. U think maybe you
studied too much. You remember:
1)This is just a forecast
2)Error Term, actual GPA will vary upon variation of error term
3)coeffecient estimates differ for each peep
2)Suppose R.V. has PDFof f(x)=a for x’s b/w 10 & 6 & =0 otherwise.
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 Spring '08
 Staff

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