Consider the following simple regression model y = 0 + 1x1 + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument relevance?

A) Cov(z,u) > 0 B) Cov(z,u) 0 B) Cov(z,u) < 0 C) Cov(z,x) 0 D) Cov(z,x z) = 0

Consider the following simple regression model y = β0 + β1x1 + u. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0. Then, the OLS estimator has a(n) _____.

A) downward bias B) asymptotic bias C) upward bias D) substantial bias A) downward bias B) asymptotic bias C) upward bias D) substantial bias

Consider the following simple regression model y = 0 + 1x1 + u. The variable z is a poor instrument for x if _____.

A) there is a high correlation between z and x B) there is a low correlation between z and x C) there is a high correlation between z and u D) there is a low correlation between z and u A) there is a high correlation between z and x B) there is a low correlation between z and x C) there is a high correlation between z and u D) there is a low correlation between z and u

Consider the following simple regression model: y = 0 + 1x1 + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument exogeneity?

A) Cov(z,u) > 0 B) Cov(z,x) > 0 C) Cov(z,u) = 0 D) Cov(z,x) = 0 A) Cov(z,u) > 0 B) Cov(z,x) > 0 C) Cov(z,u) = 0 D) Cov(z,x) = 0

Exam 15: Instrumental Variables Estimation and Two Strage Least Squares

Which of the following assumptions is required for two stages least squares estimation with time series data but not required for two-stage least squares estimation with cross sectional data?

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

If the instrumental variable estimator has an upward bias, the ordinary least square estimator always has a downward bias.

Free

(True/False)

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(36)

Question 2

Correct Answer:

Verified

False

Two stage least squares estimation cannot be applied to a panel data set.

Free

(True/False)

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(35)

Question 3

Correct Answer:

Verified

False

A standard linear model which is supposed to measure a causal relationship is called a structural equation.

(True/False)

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Question 4

Consider the following simple regression model y = ₀ + ₁x₁ + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument relevance?

(Multiple Choice)

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Question 5

Consider the following simple regression model y = β₀ + β₁x₁ + u. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0. Then, the OLS estimator has a(n) _____.

(Multiple Choice)

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Question 6

Consider the following simple regression model y = β₀ + β₁x₁ + u and z is an instrument for x. Suppose x and z are both positively correlated with u and Corr(z,x) > 0. Then, the asymptotic bias in the IV estimator is less than that for OLS only if:

(Multiple Choice)

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Question 7

Which of the following is true of two stage least squares estimators?

(Multiple Choice)

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Question 8

Consider the following simple regression model y = ₀ + ₁x₁ + u. The variable z is a poor instrument for x if _____.

(Multiple Choice)

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Question 9

The procedure of comparing different instrumental variables estimates of the same parameter is an example of testing _____.

(Multiple Choice)

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Question 10

If we focus only on consistency, it is necessarily better to use IV than OLS if the correlation between z and u is smaller than that between x and u.

(True/False)

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Question 11

The order condition for identification of an equation requires that there should be _____.

(Multiple Choice)

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Question 12

Consider the following simple regression model: y = ₀ + ₁x₁ + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument exogeneity?

(Multiple Choice)

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Question 13

Which does an intention-to-treat parameter measure in a program evaluation study?

(Multiple Choice)

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Question 14

Consider the following simple regression model: y = ₀ + ₁x₁ + u. In order to obtain consistent estimators of ₀ and ₁, when x and u are correlated, a new variable z is introduced into the model which satisfies the following two conditions: Cov(z,x) 0 and Cov (z,u) = 0. The variable z is called a(n) _____ variable.

(Multiple Choice)

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Question 15

Which of the following assumptions is required for two-stage least squares estimation method?

(Multiple Choice)

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Question 16

Identification fails when there are more included endogenous variables than excluded exogenous variables in the structural equation.

(True/False)

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Question 17

What can we conclude about the endogeneity of an explanatory variable if the OLS and 2SLS estimates are significantly different? Assume that the instrument used was exogenous.

(Multiple Choice)

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Question 18

The sampling variance for the instrumental variables (IV) estimator is larger than the variance for the ordinary least square estimators (OLS) because _____.

(Multiple Choice)

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Question 19

The necessary condition for identification of an equation is called the _____.

(Multiple Choice)

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Question 20

Showing 1 - 20 of 29

Which of the following assumptions is required for two stages least squares estimation with time series data but not required for two-stage least squares estimation with cross sectional data?

If the instrumental variable estimator has an upward bias, the ordinary least square estimator always has a downward bias.

Two stage least squares estimation cannot be applied to a panel data set.

A standard linear model which is supposed to measure a causal relationship is called a structural equation.

Consider the following simple regression model y = ₀ + ₁x₁ + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument relevance?

Consider the following simple regression model y = β₀ + β₁x₁ + u. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0. Then, the OLS estimator has a(n) _____.

Consider the following simple regression model y = β₀ + β₁x₁ + u and z is an instrument for x. Suppose x and z are both positively correlated with u and Corr(z,x) > 0. Then, the asymptotic bias in the IV estimator is less than that for OLS only if:

Which of the following is true of two stage least squares estimators?

Consider the following simple regression model y = ₀ + ₁x₁ + u. The variable z is a poor instrument for x if _____.

The procedure of comparing different instrumental variables estimates of the same parameter is an example of testing _____.

If we focus only on consistency, it is necessarily better to use IV than OLS if the correlation between z and u is smaller than that between x and u.

The order condition for identification of an equation requires that there should be _____.

Consider the following simple regression model: y = ₀ + ₁x₁ + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument exogeneity?

Which does an intention-to-treat parameter measure in a program evaluation study?

Which of the following assumptions is required for two-stage least squares estimation method?

Identification fails when there are more included endogenous variables than excluded exogenous variables in the structural equation.

What can we conclude about the endogeneity of an explanatory variable if the OLS and 2SLS estimates are significantly different? Assume that the instrument used was exogenous.

The sampling variance for the instrumental variables (IV) estimator is larger than the variance for the ordinary least square estimators (OLS) because _____.

The necessary condition for identification of an equation is called the _____.

The Nature of Econometrics and Economic Data

The Simple Regression Model

Multiple Regression Analysis Estimation

Multiple Regression Analysis Inference

Multiple Regression Analysis Ols Asymptotics

Multiple Regression Analysis Further Issues

Multiple Regression Analysis With Qualitative Information

Heteroskedasticity

More on Specification and Data Issues

Basic Regression Analysis With Time Series Data

Further Issues in Using Ols With Time Sries Data

Serial Correlation and Heteroskedasticity in Time Series Regressions

Pooling Cross Sections Across Time Simple Panel Data Methods

Advanced Panel Data Methods

Simultaneous Equations Models

Limited Dependent Variable Models and Sample Selection Correctons

Advanced Time Series Topics

Carrying Out an Empirical Project

Filters

Exam 15: Instrumental Variables Estimation and Two Strage Least Squares

Which of the following assumptions is required for two stages least squares estimation with time series data but not required for two-stage least squares estimation with cross sectional data?

If the instrumental variable estimator has an upward bias, the ordinary least square estimator always has a downward bias.

Two stage least squares estimation cannot be applied to a panel data set.​

​A standard linear model which is supposed to measure a causal relationship is called a structural equation.

Consider the following simple regression model y = 0 + 1x1 + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument relevance?

​Consider the following simple regression model y = β0 + β1x1 + u. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0. Then, the OLS estimator has a(n) _____.

Consider the following simple regression model y = β0 + β1x1 + u and z is an instrument for x. Suppose x and z are both positively correlated with u and Corr(z,x) > 0. Then, the asymptotic bias in the IV estimator is less than that for OLS only if:​

Which of the following is true of two stage least squares estimators?

Consider the following simple regression model y = 0 + 1x1 + u. The variable z is a poor instrument for x if _____.

The procedure of comparing different instrumental variables estimates of the same parameter is an example of testing _____.

If we focus only on consistency, it is necessarily better to use IV than OLS if the correlation between z and u is smaller than that between x and u.

The order condition for identification of an equation requires that there should be _____.

Consider the following simple regression model: y = 0 + 1x1 + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument exogeneity?

Which does an intention-to-treat parameter measure in a program evaluation study?

Which of the following assumptions is required for two-stage least squares estimation method?

Identification fails when there are more included endogenous variables than excluded exogenous variables in the structural equation.

What can we conclude about the endogeneity of an explanatory variable if the OLS and 2SLS estimates are significantly different? Assume that the instrument used was exogenous.

The sampling variance for the instrumental variables (IV) estimator is larger than the variance for the ordinary least square estimators (OLS) because _____.

The necessary condition for identification of an equation is called the _____.

The Nature of Econometrics and Economic Data

The Simple Regression Model

Multiple Regression Analysis Estimation

Multiple Regression Analysis Inference

Multiple Regression Analysis Ols Asymptotics

Multiple Regression Analysis Further Issues

Multiple Regression Analysis With Qualitative Information

Heteroskedasticity

More on Specification and Data Issues

Basic Regression Analysis With Time Series Data

Further Issues in Using Ols With Time Sries Data

Serial Correlation and Heteroskedasticity in Time Series Regressions

Pooling Cross Sections Across Time Simple Panel Data Methods

Advanced Panel Data Methods

Simultaneous Equations Models

Limited Dependent Variable Models and Sample Selection Correctons

Advanced Time Series Topics

Carrying Out an Empirical Project

Filters

Two stage least squares estimation cannot be applied to a panel data set.

A standard linear model which is supposed to measure a causal relationship is called a structural equation.

Consider the following simple regression model y = ₀ + ₁x₁ + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument relevance?

Consider the following simple regression model y = β₀ + β₁x₁ + u. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0. Then, the OLS estimator has a(n) _____.

Consider the following simple regression model y = β₀ + β₁x₁ + u and z is an instrument for x. Suppose x and z are both positively correlated with u and Corr(z,x) > 0. Then, the asymptotic bias in the IV estimator is less than that for OLS only if:

Consider the following simple regression model y = ₀ + ₁x₁ + u. The variable z is a poor instrument for x if _____.

Consider the following simple regression model: y = ₀ + ₁x₁ + u. Suppose z is an instrument for x. Which of the following conditions denotes instrument exogeneity?