HomeWork2_Econometrics

# HomeWork2_Econometrics - ECONOMICS 598 ECONOMETRIC THEORY...

This preview shows pages 1–2. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ECONOMICS 598 ECONOMETRIC THEORY AND APPLICATIONS HOMEWORK 2 Due: 3PM on October 15, 2010 1 1. (15 pts) For the regression model i i i i X X y ε β β β + + + = 2 2 1 1 for which the classical assumptions hold, you obtained the following results on the basis of 100 observations: 7 . 1 ˆ = β . 3 ˆ 1 − = β 9 . 1 ˆ 2 = β a. (5 pts) Test at the 5% significance level the hypothesis that 2 = β . b. (5 pts) An economic theory implies that 1 2 1 − = + β β . Test this prediction at the 5% significance level. c. (5 pts) Let the equation be re-estimated after X 2 is dropped from the regression. Under what conditions will the estimated coefficient of X 1 change? 2. (15 pts) Consider the model ε β + = X Y for which the classical assumptions hold and for which there are n observations. Let X be partitioned as follows [ ] 2 1 X X . That is, the model can be written as: ε β β + + = 2 2 1 1 X X Y Rather than OLS on this model, it is decided to use OLS on the following model: ε β β...
View Full Document

{[ snackBarMessage ]}

### Page1 / 2

HomeWork2_Econometrics - ECONOMICS 598 ECONOMETRIC THEORY...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online