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Math · Advanced Math
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Answer four of the following. In each case limit your answer to one page. (a) Suppose you were told that the stochastic component of the data generating process was zero for (b) Explain what we mean by the standard error of the OLS estimator and discuss how it can be used to (c) Suppose the true value of a parameter was.75. You are given two estimators A and B which you are 1. everyone. What does this mean and what implications if any does it have for you as an econometrician? illustrate the importance of large samples when carrying out research. going to use to guess this value. Both estimators can only take on two values: 0 or 1 and their sampling distributions are given by following equations: ACx)75*.251for 0,1 and zero otherwise fB(x) = .25% 751-x for x = 0.1 and zero otherwise Which estimator would you prefer and why? (d) Consider the regression model given by Y,-A + β? X, +/,w, + β2+ e . Discuss how you would test the conjecture that the effect of X on Y was equal to the effect of Z on Y Explain the intuition behind the weighted least squares estimator and discuss when you might use such an estimator when carrying out research. (e)

Parts a, c & e

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