ex2_answer_120c_su09ss1-1

ex2_answer_120c_su09ss1-1 - STUDENT CONSENT FOR RELEASE OF...

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STUDENT CONSENT FOR RELEASE OF STUDENT INFORMATION (Buckley Waiver) I hereby authorize the UCSD Economics Department to return my graded final examination/research paper by placing it in a location accessible to all students in the course. I understand that the return of my examination/research paper as described above may result in disclosure of personally identifiable information, that is not public information as defined in UCSD PPM 160-2, and I hereby consent to the disclosure of such information. Quarter Summer 2009 – Session 1 Course Econ 120C Date July 31, 2009 Instructor Professor Yongil Jeon S t u d e n t I D # P r i n t N a m e S i g n a t u r e
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2 Answer to FINAL EXAM, ECO 120C, Summer 2009 – S1 Economics 120C Name: _________________________ Professor Yongil Jeon July 31, 2009 (7-10pm) Student ID#: ________key_______ 1. (15 points) Multiple Choices a) (5 points) When you add time fixed effects to a simple regression model for U.S. states over a certain time period, and the regression 2 R increases significantly, then it is safe to assume that a. the included explanatory variables, other than the state fixed effects, are unimportant. b. state fixed effects account for a large amount of the variation in the data. c. the coefficients on the other included explanatory variables will not change. d. time fixed effects are mainly explained for data variations. Answer : d b) (5 points) When the treatment is not randomly assigned, the causal effect a. cannot be estimated since correlation does not imply causation. b. assumes that the same subject is being given different treatments at different points in time. c. can be estimated using the “differences-in-differences” estimator in the panel data. d. can be estimated by looking at the difference between the treatment and the control group after the treatment has taken place. Answer : c c) (5 points) The Prais-Winsten estimation is a. a special case of GLS estimation. b. a method to compute HAC standard errors. c. a special case of maximum likelihood estimation. d. a grid search for the autoregressive parameters on the error process. Answer : a
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3 Answer to FINAL EXAM, ECO 120C, Summer 2009 – S1 2. (5 points) Consider the binary variable version of the fixed effects model Y it = β 0 + 1 X it + γ 1 D 1 i + 2 D 2 i + . . . + n Dn i + u it , Show that, for general n , the inclusion of all binary regressors and the “constant” regressor are perfectly multicollinear. Answer The inclusion of all the binary regressors and the “constant” regressor causes perfect multicollinearity. The constant regressor is a perfect linear function of the n binary regressors. OLS estimators cannot be computed in this case.
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ex2_answer_120c_su09ss1-1 - STUDENT CONSENT FOR RELEASE OF...

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