Supposethedatawerecollectedthroughatelephonesurveyandt

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Unformatted text preview: od_c is the true food expenditure, e is the measurement error independent of all the other variables. We would expect that: a) OLS estimators for the coefficients will all be biased b) OLS estimators for the coefficients will all be unbiased c) all the standard errors will be bigger than they would be without the measurement error d) both b) and c) 5. Suppose the data were collected through a telephone survey, and the last 4 digits of the households’ telephone number was accidentally coded as something else and included in the regression. Denote the coefficient as β3 .We would expect ˆˆ ˆ a) the OLS estimators β1 , β 2 , and β3 are all biased. ˆ ˆ ˆ b) OLS estimator β is invalid, but β , and β are valid. 3 1 2 ˆ ˆ c) the OLS estimators β1 , and β 2 are unbiased, and R2 will get larger. ˆ ˆ d) the OLS estimators β , and β are unbiased, and R2 will not change. 1 2 6. You have to worry about perfect collinearity i...
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