Professor Tanya Molodtsova
ECON 420
Office: Rich 319
Econometrics
Email:
[email protected]
Fall 2011
Practice Questions 1
1.
The following table contains Test Score in percentages and average Class Size for 3 school
districts.
Student
Test Score
Class Size
1
83
40
2
88
30
3
96
25
4.
87
32
5.
94
22
a) Estimate the linear relationship between GPA and ACT using OLS, that is, obtain the intercept and the
slope estimates of the equation
Test Score
i
= α +
Class Size
β
i
+ u
i
b) Comment on the direction of the relationship. Interpret the coefficients. Does the intercept have a
useful interpretation here? Why? By how much will the predicted Test Score increase, if Class Size
increases by 5 students?
c) Compute the fitted values and the residuals for each observation. Do the residuals approximately add
up to zero?
d) How much of the variation in Test Score for these 3 students is explained by Class Size?
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
2.
The cost of attending your college has once again gone up. Although you have been told that
This is the end of the preview.
Sign up
to
access the rest of the document.
 Spring '11
 silous
 Econometrics, test score, Liberal arts college, class size, size

Click to edit the document details