Wooldridge IE AISE SSM app c - This edition is intended for...

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

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher. 120 APPENDIX C SOLUTIONS TO PROBLEMS C.1 (i) This is just a special case of what we covered in the text, with n = 4: E( Y ) = and Var( Y ) = 2 /4. (ii) E( W ) = E( Y 1 )/8 + E( Y 2 )/8 + E( Y 3 )/4 + E( Y 4 )/2 = [(1/8) + (1/8) + (1/4) + (1/2)] = (1 + 1 + 2 + 4)/8 = , which shows that W is unbiased. Because the Y i are independent, Var( W ) = Var( Y 1 )/64 + Var( Y 2 )/64 + Var( Y 3 )/16 + Var( Y 4 )/4 = 2 [(1/64) + (1/64) + (4/64) + (16/64)] = 2 (22/64) = 2 (11/32). (iii) Because 11/32 > 8/32 = 1/4, Var( W ) > Var( Y ) for any 2 > 0, so Y is preferred to W because each is unbiased. C.3 (i) E( W 1 ) = [( n 1)/ n ]E( Y ) = [( n 1)/ n ] , and so Bias( W 1 ) = [( n 1)/ n ] = / n ....
View Full Document

This note was uploaded on 09/11/2011 for the course ECONOMICS eco375 taught by Professor Suzuki during the Spring '11 term at University of Toronto- Toronto.

Page1 / 2

Wooldridge IE AISE SSM app c - This edition is intended for...

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

View Full Document Right Arrow Icon
Ask a homework question - tutors are online