Question 1

Which of the following is true?

Accepted Answer

A) A functional form misspecification can occur if the level of a variable is used when the logarithm is more appropriate. 
B) A functional form misspecification occurs only if a key variable is uncorrelated with the error term. 
C) A functional form misspecification does not lead to biasedness in the ordinary least squares estimators. 
D) A functional form misspecification does not lead to inconsistency in the ordinary least squares estimators. 
A) A functional form misspecification can occur if the level of a variable is used when the logarithm is more appropriate. 
B) A functional form misspecification occurs only if a key variable is uncorrelated with the error term. 
C) A functional form misspecification does not lead to biasedness in the ordinary least squares estimators. 
D) A functional form misspecification does not lead to inconsistency in the ordinary least squares estimators. A

Question 2

Under the classical errors-in-variables (CEV) assumption, the measurement error means that the estimated OLS effect, on average, is closer to zero than the true effect.

Accepted Answer

A) True 
 B)False  True

Question 3

A proxy variable _____.

Accepted Answer

A) increases the error variance of a regression model 
B) cannot contain binary information 
C) is used when data on a key independent variable is unavailable 
D) is detected by running the Davidson-MacKinnon test 
A) increases the error variance of a regression model 
B) cannot contain binary information 
C) is used when data on a key independent variable is unavailable 
D) is detected by running the Davidson-MacKinnon test C

Question 4

Consider the following equation for household consumption expenditure: Consmptn=   0+   1Inc +   2Consmptn-1+ u
Where 'Consmptn' measures the monthly consumption expenditure of a household, 'Inc' measures household income and 'Consmptn-1' is the consumption expenditure in the previous month. Consmptn-1 is a _____ variable.

Accepted Answer

A) exogenous 
B) binary variable 
C) lagged dependent 
D) proxy variable 
A) exogenous 
B) binary variable 
C) lagged dependent 
D) proxy variable

Question 5

Which of the following is true of measurement error?

Accepted Answer

A) If measurement error in a dependent variable has zero mean, the ordinary least squares estimators for the intercept are biased and inconsistent. 
B) If measurement error in an independent variable is uncorrelated with the variable, the ordinary least squares estimators are unbiased. 
C) If measurement error in an independent variable is uncorrelated with other independent variables, all estimators are biased. 
D) If measurement error in a dependent variable is correlated with the independent variables, the ordinary least squares estimators are unbiased. 
A) If measurement error in a dependent variable has zero mean, the ordinary least squares estimators for the intercept are biased and inconsistent. 
B) If measurement error in an independent variable is uncorrelated with the variable, the ordinary least squares estimators are unbiased. 
C) If measurement error in an independent variable is uncorrelated with other independent variables, all estimators are biased. 
D) If measurement error in a dependent variable is correlated with the independent variables, the ordinary least squares estimators are unbiased.

Question 6

Which of the following assumptions is needed for the plug-in solution to the omitted variables problem to provide consistent estimators?

Accepted Answer

A) The error term in the regression model exhibits heteroskedasticity. 
B) The error term in the regression model is uncorrelated with all the independent variables. 
C) The proxy variable is uncorrelated with the dependent variable. 
D) The proxy variable has zero conditional mean. 
A) The error term in the regression model exhibits heteroskedasticity. 
B) The error term in the regression model is uncorrelated with all the independent variables. 
C) The proxy variable is uncorrelated with the dependent variable. 
D) The proxy variable has zero conditional mean.

Question 7

Sample selection based on the dependent variable is called _____.

Accepted Answer

A) random sample selection 
B) endogenous sample selection 
C) exogenous sample selection 
D) stratified sample selection 
A) random sample selection 
B) endogenous sample selection 
C) exogenous sample selection 
D) stratified sample selection

Question 8

A regression model suffers from functional form misspecification if _____.

Accepted Answer

A) a key variable is binary. 
B) the dependent variable is binary. 
C) an interaction term is omitted. 
D) the coefficient of a key variable is zero. 
A) a key variable is binary. 
B) the dependent variable is binary. 
C) an interaction term is omitted. 
D) the coefficient of a key variable is zero.

Question 9

The method of data collection in which the population is divided into nonoverlapping, exhaustive groups is called _____.

Accepted Answer

A) random sampling 
B) stratified sampling 
C) endogenous sampling 
D) exogenous sampling 
A) random sampling 
B) stratified sampling 
C) endogenous sampling 
D) exogenous sampling

Question 10

Studentized residuals are obtained from the original OLS residuals by dividing them by an estimate of their standard deviation.

Accepted Answer

A) True 
 B)False

Question 11

If the data are missing at random, then the missing data do not cause any statistical problems.​

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a drawback of including proxy variables in a regression model?

Accepted Answer

A) It leads to misspecification analysis. 
B) It reduces the error variance. 
C) It increases the error variance. 
D) It exacerbates multicollinearity. 
A) It leads to misspecification analysis. 
B) It reduces the error variance. 
C) It increases the error variance. 
D) It exacerbates multicollinearity.

Question 13

A complete cases estimator is an estimator that uses: only observations with a complete set of data on y and x1, ..., xk

Accepted Answer

A) only observations with a complete set of data on x1, ..., xk. 
B) complete information about the residuals. 
C) only observations with a complete set of data on y and x1, ..., xk. 
D) complete information about the outliers. 
A) only observations with a complete set of data on x1, ..., xk. 
B) complete information about the residuals. 
C) only observations with a complete set of data on y and x1, ..., xk. 
D) complete information about the outliers.

Question 14

Which of the following types of sampling always causes bias or inconsistency in the ordinary least squares estimators?

Accepted Answer

A) Random sampling 
B) Exogenous sampling 
C) Endogenous sampling 
D) Stratified sampling 
A) Random sampling 
B) Exogenous sampling 
C) Endogenous sampling 
D) Stratified sampling

Question 15

If only one of the independent variables has a measurement error, which of the following is generally true under the classical errors-in-variables (CEV) assumption?

Accepted Answer

A) The OLS estimators for coefficients on all other independent variables are also biased towards zero. 
B) The OLS estimators for coefficients on all other independent variables are still unbiased and consistent. 
C) The OLS estimators for coefficients on all other independent variables are also biased and inconsistent. 
D) The OLS estimators for coefficients on all other independent variables are biased but consistent. 
A) The OLS estimators for coefficients on all other independent variables are also biased towards zero. 
B) The OLS estimators for coefficients on all other independent variables are still unbiased and consistent. 
C) The OLS estimators for coefficients on all other independent variables are also biased and inconsistent. 
D) The OLS estimators for coefficients on all other independent variables are biased but consistent.

Question 16

One of the assumptions for the plug-in solution to provide consistent estimators of β1 and β2 is that the error u is uncorrelated with all the independent variables.
​

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is true of Regression Specification Error Test (RESET)?

Accepted Answer

A) It tests if the functional form of a regression model is misspecified. 
B) It detects the presence of dummy variables in a regression model. 
C) It helps in the detection of heteroskedasticity when the functional form of the model is correctly specified. 
D) It helps in the detection of multicollinearity among the independent variables in a regression model. 
A) It tests if the functional form of a regression model is misspecified. 
B) It detects the presence of dummy variables in a regression model. 
C) It helps in the detection of heteroskedasticity when the functional form of the model is correctly specified. 
D) It helps in the detection of multicollinearity among the independent variables in a regression model.

Question 18

The measurement error is the difference between the actual value of a variable and its reported value.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a test of nonnested models?​

Accepted Answer

A) ​Davidson-MacKinnon test 
B) ​Standard F test 
C) ​Regression Specification Error Test 
D) White test 
A) ​Davidson-MacKinnon test 
B) ​Standard F test 
C) ​Regression Specification Error Test 
D) White test

Question 20

A measurement error occurs in a regression model when _____.

Accepted Answer

A) the observed value of a variable used in the model differs from its actual value 
B) the dependent variable is binary 
C) the partial effect of an independent variable depends on unobserved factors 
D) the model includes more than two independent variables 
A) the observed value of a variable used in the model differs from its actual value 
B) the dependent variable is binary 
C) the partial effect of an independent variable depends on unobserved factors 
D) the model includes more than two independent variables

Which of the following is true?

Under the classical errors-in-variables (CEV) assumption, the measurement error means that the estimated OLS effect, on average, is closer to zero than the true effect.

A proxy variable _____.

Which of the following is true of measurement error?

Which of the following assumptions is needed for the plug-in solution to the omitted variables problem to provide consistent estimators?

Sample selection based on the dependent variable is called _____.

A regression model suffers from functional form misspecification if _____.

The method of data collection in which the population is divided into nonoverlapping, exhaustive groups is called _____.

Studentized residuals are obtained from the original OLS residuals by dividing them by an estimate of their standard deviation.

If the data are missing at random, then the missing data do not cause any statistical problems.

Which of the following is a drawback of including proxy variables in a regression model?

A complete cases estimator is an estimator that uses: only observations with a complete set of data on y and x₁, ..., x_k

Which of the following types of sampling always causes bias or inconsistency in the ordinary least squares estimators?

If only one of the independent variables has a measurement error, which of the following is generally true under the classical errors-in-variables (CEV) assumption?

One of the assumptions for the plug-in solution to provide consistent estimators of β₁ and β₂ is that the error u is uncorrelated with all the independent variables.

Which of the following is true of Regression Specification Error Test (RESET)?

The measurement error is the difference between the actual value of a variable and its reported value.

Which of the following is a test of nonnested models?

A measurement error occurs in a regression model when _____.

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

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

Instrumental Variables Estimation and Two Strage Least Squares

Simultaneous Equations Models

Limited Dependent Variable Models and Sample Selection Correctons

Advanced Time Series Topics

Carrying Out an Empirical Project

Filters

Exam 9: More on Specification and Data Issues

Which of the following is true?

Under the classical errors-in-variables (CEV) assumption, the measurement error means that the estimated OLS effect, on average, is closer to zero than the true effect.

A proxy variable _____.

Which of the following is true of measurement error?

Which of the following assumptions is needed for the plug-in solution to the omitted variables problem to provide consistent estimators?

Sample selection based on the dependent variable is called _____.

A regression model suffers from functional form misspecification if _____.

The method of data collection in which the population is divided into nonoverlapping, exhaustive groups is called _____.

Studentized residuals are obtained from the original OLS residuals by dividing them by an estimate of their standard deviation.

If the data are missing at random, then the missing data do not cause any statistical problems.​

Which of the following is a drawback of including proxy variables in a regression model?

A complete cases estimator is an estimator that uses: only observations with a complete set of data on y and x1, ..., xk

Which of the following types of sampling always causes bias or inconsistency in the ordinary least squares estimators?

If only one of the independent variables has a measurement error, which of the following is generally true under the classical errors-in-variables (CEV) assumption?

One of the assumptions for the plug-in solution to provide consistent estimators of β1 and β2 is that the error u is uncorrelated with all the independent variables. ​

Which of the following is true of Regression Specification Error Test (RESET)?

The measurement error is the difference between the actual value of a variable and its reported value.

Which of the following is a test of nonnested models?​

A measurement error occurs in a regression model when _____.

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

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

Instrumental Variables Estimation and Two Strage Least Squares

Simultaneous Equations Models

Limited Dependent Variable Models and Sample Selection Correctons

Advanced Time Series Topics

Carrying Out an Empirical Project

Filters

If the data are missing at random, then the missing data do not cause any statistical problems.

A complete cases estimator is an estimator that uses: only observations with a complete set of data on y and x₁, ..., x_k

One of the assumptions for the plug-in solution to provide consistent estimators of β₁ and β₂ is that the error u is uncorrelated with all the independent variables.

Which of the following is a test of nonnested models?