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Melissa tartari yale econometrics 57 93 failure of

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Unformatted text preview: o + β1 X + 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). We assume the linear in parameters relationship Y = βo + β1 X + U . the model posits that the e¤ect of attending a private high school on college grades is the same irrespective of whether the student is attending a 2 yr of a 4 yr college and it is also the same irrespective of his or her ability; 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 = βo + β1 X + U . the model posits that the e¤ect of attending a private high school on college grades is the same irrespective of whether the student is attending a 2 yr of a 4 yr college and it is also the same irrespective of his or her ability; we are interested in β1 because it allows us to learn about the e¤ect on college grades of private versus public high school other things (namely, ability and drive) constant. Melissa Tartari (Yale) Econometrics 57 / 93 Failure of SLR.2: An Example (Description II) The population of college students is composed of two groups: group A: 2yr college students; group B: 4yr college students. Melissa Tartari (Y...
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