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2 an example description i we posit that a student

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Unformatted text preview: s to be biased. We now look at this issue more closely by means of an example. Melissa Tartari (Yale) Econometrics 56 / 93 Failure of SLR.2 We stated that failure of SLR.2 (random sampling ) may cause the OLS estimators to be biased. We now look at this issue more closely by means of an example. The issue is important because very often the data that is available to the researcher is not a random sample from the population of interest. Melissa Tartari (Yale) Econometrics 56 / 93 Failure of SLR.2 We stated that failure of SLR.2 (random sampling ) may cause the OLS estimators to be biased. We now look at this issue more closely by means of an example. The issue is important because very often the data that is available to the researcher is not a random sample from the population of interest. As part of the same example we also revisit failure of SLR.3 as well as the normalization E [U ] = 0. Melissa Tartari (Yale) Econometrics 56 / 93 Failure of SLR.2: An Example (Description I) We posit that a student’ college grades (Y ) are determined by the s amount of knowledge that the student acquired in high school (X ) and his or her the innate drive (e.g. study e¤ort) and ability (U ). Melissa Tartari (Yale) Econometrics 57 / 93 Failure of SLR.2: An Example (Description I) We posit that a student’ college grades (Y ) are determined by the s amount of knowledge that the student acquired in high school (X ) and his or her the innate drive (e.g. study e¤ort) and ability (U ). We assume that the amount of knowledge that the student acquired in high school X varies only on the basis of the type of high school attended, namely, private (X = 1) versus public (X = 0). Melissa Tartari (Yale) Econometrics 57 / 93 Failure of SLR.2: An Example (Description I) We posit that a student’ college grades (Y ) are determined by the s amount of knowledge that the student acquired in high school (X ) and his or her the innate drive (e.g. study e¤ort) and ability (U ). We assume that the amount of knowledge that the student acquired in high school X varies only on the basis of the type of high school attended, namely, private (X = 1) versus public (X = 0). We assume the linear in parameters relationship Y = ...
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This note was uploaded on 02/13/2014 for the course ECON 350 taught by Professor Donaldbrown during the Fall '10 term at Yale.

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