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Quiz 2 Sketched out answers Econ140A 2013Fall

# 5 the average of 134 and 136 since there are the same

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Unformatted text preview: 13.6 since there are the same number of men and women in the sample. (e) This equation cannot be estimated due to perfect multicollinearity. The data for the constant term is 1’s and MALE = 1 – FE. Thus, the constant term is just a linear function of the male and female variables: ( ). 4. (a) ̂ ∑ ∑ (̂ ) ∑ ( ( ∑ ∑ ) ∑ ∑ ∑ (b) We know that If ( ∑ ∑ ∑ (∑ ) ) ∑ ∑ ∑ ( ∑ ) from the assumptions that ( ) then (∑ ) ) ( ∑ ∑ ) ) ∑ ( ∑ ) . , so (̂ ) Therefore, ̂ is unbiased. (c) As in part (b), we have (̂ ) ( ∑ ∑ ∑ ∑ The last term is still zero, but now since ∑ ( ∑ ) ( ) ∑ ( ∑ (̂ ) 3 we know that ∑ ) . Thus, page 4 ̂ is biased. (d) From the previous part, ∑ ( ∑ (̂ ) we know that ∑ . Thus, words, ̂ is biased downwards. ∑ (∑ ) 4 ) . This means that ( ̂ ) . In other...
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