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metricsexam2f07

# metricsexam2f07 - Econometrics Exam 2 Dec 8 2007 By writing...

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Econometrics Exam 2 By writing your PID below, you are indicating Dec. 8, 2007 your intention to abide by the honor pledge: PID: This exam consists of ten short questions ( worth four points apiece ) and five long questions ( worth twelve points each ) , for a total of 100 points. You have 120 minutes to answer all completely and clearly in the space provided. Short Questions 1. When working with panel data ( in the standard model Y it = X it ! + c i + e it ) , how would you check for endogeneity ( correlation between X i and e i ) ? 2. What is the advantage of using seemingly unrelated regression instead of OLS? 3. What can you interpret from the estimated coefficients of a probit or logit model?

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4. You have a system of equations in which two variables affect each other: you believe that health determines income, but income also affects health. What would you need in order to identify the effect of health on income? 5. Using T years of panel data, you wish to estimate the model Y it = X it ! + c i + u it . You are comfortable making the assumption that E [ u it | X i 1 , X i 2 , , X it ] = 0 . How would you estimate ? 6. When would you use
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metricsexam2f07 - Econometrics Exam 2 Dec 8 2007 By writing...

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