slides_Ch2_W[1]

# Melissa tartari yale econometrics 57 93 failure of

This preview shows page 1. Sign up to view the full content.

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

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...
View Full Document

Ask a homework question - tutors are online