Ch. 9 - econometrics

The reliability of a study using multiple regression analysis depends on all of the following with the exception of A) omitted variable bias. B) errors-in-variables. C) presence of homoskedasticity in the error term. D) external validity.

C

The question of reliability/unreliability of a multiple regression depends on A) internal but not external validity B) the quality of your statistical software package C) internal and external validity D) external but not internal validity

C

Sample selection bias A) occurs when a selection process influences the availability of data and that process is related to the dependent variable. B) is only important for finite sample results. C) results in the OLS estimator being unbiased and consistent. D) is more important for nonlinear least squares estimation than for OLS.

A

A survey of earnings contains an unusually high fraction of individuals who state their weekly earnings in 100s, such as 300, 400, 500, etc. This is an example of A) errors-in-variables bias. B) sample selection bias. C) simultaneous causality bias. D) companies that typically bargain with workers in 100s of dollars.

B

Applying the analysis from the California test scores to another U.S. state is an example of looking for A) simultaneous causality bias. B) external validity. C) sample selection bias. D) internal validity.

B

By including another variable in the regression, you will: A) decrease the regression R2 if that variable is important. B) eliminate the possibility of omitted variable bias from excluding that variable. C) look at the t-statistic of the coefficient of that variable and include the variable only if the coefficient is statistically significant at the 1% level. D) decrease the variance of the estimator of the coefficients of interest.

B

Errors-in-variables bias A) is present when the probability limit of the OLS estimator B) arises when an independent variable is measured imprecisely. C) arises when the dependent variable is measured precisely. D) always occurs in economics since economic data is never precisely measured.

B

Errors-in-variables bias: A) is only a problem in small samples. B) arises from error in the measurement of the independent variable. C) becomes larger as the variance in the explanatory variable increases relative to the error variance. D) a & b.

B

Panel data estimation can sometimes be used A) to avoid the problems associated with misspecified functional forms. B) in case the sum of residuals is not zero. C) in the case of omitted variable bias when data on the omitted variable is not available. D) to counter sample selection bias.

C

The analysis is externally valid if A) the statistical inferences about causal effects are valid for the population being studied. B) the study has passed a double blind refereeing process for a journal. C) its inferences and conclusions can be generalized from the population and setting studied to other populations and settings. D) some committee outside the author's department has validated the findings.

C

A statistical analysis is internally valid if A) all t-statistics are greater than |1.96| B) the regression R2 > 0.05 C) the population is small, say less than 2,000, and can be observed D) the statistical inferences about causal effects are valid for the population studied

D

A statistical analysis is internally valid if A) its inferences and conclusions can be generalized from the population and setting studied to other populations and settings. B) statistical inference is conducted inside the sample period. C) the hypothesized parameter value is inside the confidence interval. D) the statistical inferences about causal effects are valid for the population being studied.

D

Comparing the California test scores to test scores in Massachusetts is appropriate for external validity if A) Massachusetts also allowed beach walking to be an appropriate P.E. activity. B) the two income distributions were very similar. C) the student-to-teacher ratio did not differ by more than five on average. D) the institutional settings in California and Massachusetts, such as organization in classroom instruction and curriculum, were similar in the two states.

D

Sample selection bias occurs when A) the choice of variables is random B) data are collected from a population by simple random sampling. C) samples are chosen to be small rather than large. D) the availability of the data is influenced by a selection process that is related to the value of the dependent variable.

D

Simultaneous causality bias A) is also called sample selection bias. B) happens in complicated systems of equations called block recursive systems. C) results in biased estimators if there is heteroskedasticity in the error term. D) arises in a regression of Y on X when, in addition to the causal link of interest from X to Y, there is a causal link from Y to X.

D

The true causal effect might not be the same in the population studied and the population of interest because A) of differences in characteristics of the population B) of geographical differences C) the study is out of date D) all of the above

D