hw2-fall09

# hw2-fall09 - Homework 2 Econometrics ECO 721 Fall 2009 Due...

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Homework 2 Econometrics: ECO 721 Fall 2009 Due Thursday, September 24 You must turn in this assignment before class begins on the due date. In this and all future assignments, you are to turn in neatly written answers to all questions. Photocopies are not acceptable. Loose pages will not be accepted. You must use a staple or paper clip. 1. Consider the linear regression model y = + u . Show that i. b y = X ( X 0 X ) 1 X 0 y: ii. b u = ( I X ( X 0 X ) 1 X 0 ) y . iii. b u 0 b u = b u 0 y: 2. The dataset for this exercise is named rand7.dta . [It is reasonably large so you should increase the memory available to Stata before loading the data ( set mem 5m ).] The data, from a Health Insurance Experiment conducted by the RAND Corporation from 1974 to 1982, is the longest and largest controlled social experiment in medical care research. The by types of health insurance. In the RHIE, data were collected from about 8,000 enrollees

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## This note was uploaded on 11/12/2009 for the course ECONOMICS 721 taught by Professor Partha during the Spring '09 term at CUNY Hunter.

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hw2-fall09 - Homework 2 Econometrics ECO 721 Fall 2009 Due...

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