Question 1
What does endogenous mean, in words? What about statistically?
Question 2
If a regression is biased (from endogeneity), what can we learn about the bias?
Question 3
What does heteroskedasticity mean? Does heteroskedasticity bias ^β1?
Question 4
Is this data likely heteroskedastic or homoskedastic?
Question 5
What three things impact the variation of ^β1? How?
Question 6
What are the four assumptions we make about the error term?
Question 7
Wagesi=β0+β1Education+ui
Question 8
What does R2 measure? What does it mean? How do we calculate it?
Question 9
What does σu (SER) measure? What does it mean?
Question 10
Interpret all of these numbers (except Adjusted R-squared and the last line):
Call:
lm(formula = y ~ x, data = het_data)
Residuals:
Min 1Q Median 3Q Max
-20.9518 -2.6972 -0.1055 2.4352 25.9720
Coefficients:
Estimate Std. Error t value Pr(>|t|)
(Intercept) -0.05633 0.24844 -0.227 0.821
x -0.05289 0.14502 -0.365 0.715
Residual standard error: 5.552 on 498 degrees of freedom
Multiple R-squared: 0.0002671, Adjusted R-squared: -0.00174
F-statistic: 0.133 on 1 and 498 DF, p-value: 0.7155
Question 11
Interpret all of these numbers:
|
y |
Constant |
−0.06 |
|
(0.25) |
x |
−0.05 |
|
(0.15) |
n |
500 |
R2 |
0.00 |
SER |
5.54 |
* p < 0.1, ** p < 0.05, *** p < 0.01 |
Question 12
Suppose Y is normally distributed with a mean of 10 and a standard error of 5. What is the probability that Y is between 5 and 15?
Question 13
Explain what a Z-score means.
Question 14
Explain what a p-value means.
Question 15
We run the following hypothesis test at α=0.05:
H0:β1=0H1:β1≠0
Is this test one-sided or two-sided?
We find the p-value is 0.02. What is our conclusion? Be specific and precise in your wording!
Question 16
Suppose we ran that hypothesis test on our finding. What can we conclude?
Call:
lm(formula = y ~ x, data = het_data)
Residuals:
Min 1Q Median 3Q Max
-20.9518 -2.6972 -0.1055 2.4352 25.9720
Coefficients:
Estimate Std. Error t value Pr(>|t|)
(Intercept) -0.05633 0.24844 -0.227 0.821
x -0.05289 0.14502 -0.365 0.715
Residual standard error: 5.552 on 498 degrees of freedom
Multiple R-squared: 0.0002671, Adjusted R-squared: -0.00174
F-statistic: 0.133 on 1 and 498 DF, p-value: 0.7155
|
y |
Constant |
−0.06 |
|
(0.25) |
x |
−0.05 |
|
(0.15) |
n |
500 |
R2 |
0.00 |
SER |
5.54 |
* p < 0.1, ** p < 0.05, *** p < 0.01 |
Midterm Review ECON 480 • Econometrics • Fall 2022 Dr. Ryan Safner Associate Professor of Economics safner@hood.edu ryansafner/metricsF22 metricsF22.classes.ryansafner.com