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Assume That Var(ui|Xi)= ?0+?1 xi2x _ { i } ^ { 2 }

Question 9

Multiple Choice

Assume that var(ui|Xi) = ?0+?1 xi2x _ { i } ^ { 2 } One way to estimate ?0 and ?1 consistently is to regress


A) u^\hat {\mathrm { u }} i on xi2x _ { i } ^ { 2 } using OLS
B) u^i2\hat { u } _ { i } ^ { 2 } on xi2x _ { i } ^ { 2 } using OLS
C) u^i2\hat { u } _ { i } ^ { 2 } on x\sqrt { x } iusing OLS
D) u^i2\hat { u } _ { i } ^ { 2 } on xi2x _ { i } ^ { 2 } using OLS but suppressing the constant ("restricted least squares")

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