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BUAN 6312 Exam 2 Questions with Correct Answers.
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BUAN 6312 Exam 2 Questions with Correct Answers.
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BUAN 6312 Exam 2 Questions with Correct AnswersEndogeniety Correct Answer-Correlation between explanatory variable
and error term
Endogeniety causes the least squares estimator to be what? Correct
Answer-Biased and inconsistent
When what is correlated with the explanatory variable, the regression
error will be correlated with the explanatory variable? Correct Answer-
Omitted variable
Instrumental variables have no effect on what? Correct Answer-Y
Instrumental variables cannot be correlated with ___ but must be
correlated with___ Correct Answer-e,x
Instrumental variables are biased but what? Correct Answer-Consistent
Why are instrumental variable estimators less efficient than LSE?
Correct Answer-Variance of IV estimator is always larger than LSE
Instrumental variables need an F-stat of at least what? Correct Answer-
10
, The number of what should be greater than or equal to the number of
endogenous variables? Correct Answer-exogenous instruments
If failing to reject Ho in a Hausman test for IVs, LSE and IVE are what?
Correct Answer-consistent
If failing to reject Ho in a Hausman test for IVs, which estimator should
be used? Correct Answer-LSE
What distribution does the Hausman test use? Correct Answer-Chi
square
Which model captures behavioral differences/individual heterogeneity in
the intercept? Correct Answer-fixed effects
In which model are intercepts and slopes constant across individuals?
Correct Answer-random effects
For which model can time invariant characteristics NOT be correlated
with regressors? Correct Answer-random effects
For which model can Ui be correlated with regressors without bias?
Correct Answer-fixed effects
"Within" estimation produces incorrect what? Correct Answer-standard
errors
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