3. Suppose that a population equation is given by Y = XB + Zy+ u. Instead you estimated the following linear regression model Y = Xb+e. Assume E[u | X,Z]= 0. It is well known that the estimator of B typically will suffer from the omitted variables bias. Derive the bias and state the condition(s) under which the estimator will be still unbiased.
3. Suppose that a population equation is given by Y = XB + Zy+ u. Instead you estimated the following linear regression model Y = Xb+e. Assume E[u | X,Z]= 0. It is well known that the estimator of B typically will suffer from the omitted variables bias. Derive the bias and state the condition(s) under which the estimator will be still unbiased.
Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)
6th Edition
ISBN:9781337111348
Author:Bruce Crauder, Benny Evans, Alan Noell
Publisher:Bruce Crauder, Benny Evans, Alan Noell
Chapter5: A Survey Of Other Common Functions
Section5.6: Higher-degree Polynomials And Rational Functions
Problem 1TU: The following fictitious table shows kryptonite price, in dollar per gram, t years after 2006. t=...
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