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

A) The condition Cov(z,u) = 0 can be tested statistically. B) The condition Cov(z,x) 0 cannot be tested statistically. C) The instrumental variables estimator is always biased if Cov(x,u) 0. D) The ordinary least squares estimator is unbiased if Cov(x,u) 0 . A) The condition Cov(z,u) = 0 can be tested statistically. B) The condition Cov(z,x) 0 cannot be tested statistically. C) The instrumental variables estimator is always biased if Cov(x,u) 0. D) The ordinary least squares estimator is unbiased if Cov(x,u) 0 . C

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 = β0 + β1x1 + u. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0. Then, the IV 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. 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 Stage Least Squares

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

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

Consider the following simple regression model y = ₀ + ₁x₁ + u. Suppose z is an instrument for x. if Cov(z,u) = 0 and Cov(z,x) 0, the value of ₁ in terms of population covariances is _____.

Free

(Multiple Choice)

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Question 2

Correct Answer:

Verified

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:

Free

(Multiple Choice)

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Question 3

Correct Answer:

Verified

Increasing the number of overidentifying restrictions can cause severe biases in two stage least squares estimators.

(True/False)

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Question 4

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

(True/False)

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Question 5

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

(Multiple Choice)

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Question 6

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 7

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 IV estimator has a(n) _____.

(Multiple Choice)

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Question 8

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

(Multiple Choice)

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Question 9

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

(Multiple Choice)

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Question 10

Instrumental variables cannot be used for estimating a regression equation if the regression model suffers from the measurement error problem.

(True/False)

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Question 11

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

(Multiple Choice)

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Question 12

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

(True/False)

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Question 13

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

(Multiple Choice)

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Question 14

The test for overidentifying restrictions is valid if _____.

(Multiple Choice)

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Question 15

The two stage least squares estimator is less efficient than the ordinary least squares estimator when the explanatory variables are exogenous.

(True/False)

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Question 16

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 17

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 18

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 19

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

(Multiple Choice)

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Question 20

Showing 1 - 20 of 25

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

Consider the following simple regression model y = ₀ + ₁x₁ + u. Suppose z is an instrument for x. if Cov(z,u) = 0 and Cov(z,x) 0, the value of ₁ in terms of population covariances is _____.

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:

Increasing the number of overidentifying restrictions can cause severe biases in two stage least squares estimators.

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

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

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. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0. Then, the IV estimator has a(n) _____.

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

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

Instrumental variables cannot be used for estimating a regression equation if the regression model suffers from the measurement error problem.

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

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

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

The test for overidentifying restrictions is valid if _____.

The two stage least squares estimator is less efficient than the ordinary least squares estimator when the explanatory variables are exogenous.

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?

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

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

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: Binary or Dummy Variables

Heteroskedasticity

More on Specification and Data Problems

Basic Regression Analysis With Time Series Data

Further Issues in Using Ols With Time Series 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 Corrections

Advanced Time Series Topics

Carrying Out an Empirical Project

Filters

Exam 15: Instrumental Variables Estimation and Two Stage Least Squares

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

Consider the following simple regression model y = 0 + 1x1 + u. Suppose z is an instrument for x. if Cov(z,u) = 0 and Cov(z,x) 0, the value of 1 in terms of population covariances is _____.

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:​

Increasing the number of overidentifying restrictions can cause severe biases in two stage least squares estimators.

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

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

​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. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0. Then, the IV estimator has a(n) _____.​

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

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

Instrumental variables cannot be used for estimating a regression equation if the regression model suffers from the measurement error problem.

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

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

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

The test for overidentifying restrictions is valid if _____.

The two stage least squares estimator is less efficient than the ordinary least squares estimator when the explanatory variables are exogenous.

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?

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

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

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: Binary or Dummy Variables

Heteroskedasticity

More on Specification and Data Problems

Basic Regression Analysis With Time Series Data

Further Issues in Using Ols With Time Series 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 Corrections

Advanced Time Series Topics

Carrying Out an Empirical Project

Filters

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

Consider the following simple regression model y = ₀ + ₁x₁ + u. Suppose z is an instrument for x. if Cov(z,u) = 0 and Cov(z,x) 0, the value of ₁ in terms of population covariances is _____.

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:

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

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. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0. Then, the IV estimator has a(n) _____.

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 exogeneity?