Heteroskedastic-consistent standard errors, Applied Statistics

Assignment Help:

The following table shows the results of fitting a linear regression model of starting annual salaries on a constant, GPA (4 point scale), and a variable (Metrics =1) indicating whether the recent economics graduate took an econometrics course for a random sample of 50 recent economics graduates from a large state university. Note that econometrics was not required at this university.

1751_heteroskedastic-consistent standard errors.png

a. Can these results be used to predict what would happen if this university made econometrics a required course for economics students? (hint: consider the possibility of sample selection bias).

b. Suppose that econometrics is a very hard class, and the instructor is a very hard grader. What is the predicted change in starting salary for a student who has just taken econometrics, and this resulted in decreasing his GPA by .5 points. Give a 90% confidence interval for this prediction.  The covariance matrix of the estimated parameters are:

c. Note that the standard errors in the above regression are calculated assuming homoskedasticity.  Explain why we typically use heteroskedastic-consistent standard errors.


Related Discussions:- Heteroskedastic-consistent standard errors

Demand, A monopolist firm''s demand curve is given by P:100-2q. (a) Find it...

A monopolist firm''s demand curve is given by P:100-2q. (a) Find its marginal revenue function.

What are the hypotheses, Assume that a simple random sample has been select...

Assume that a simple random sample has been selected from a normally distribute population and test the given claim. Identify the null and alternative hypotheses, test statistic,

Write out the estimator of the linear combination, Now, let's look at a dif...

Now, let's look at a different linear combination. Suppose we are interested n comparing the average mean log income for no college education ( 16). 1. Write out the linear com

Time series, Year Production 2006 8 2007 6 2008 10 2009 12 2010 11 2011 15 ...

Year Production 2006 8 2007 6 2008 10 2009 12 2010 11 2011 15 2012 14 2013 16 Determine the trend from data given above?

Choose the correct null hypotheses, For the following claim, find the null ...

For the following claim, find the null and alternative hypotheses, test statistic, P-value, critical value and draw a conclusion. Assume that a simple random sample has been selec

The incidence of occupational disease , The incidence of occupational disea...

The incidence of occupational disease in an industry is such that the workers have a 20% chance of suffering from it. What is the probability that out of six workers 4 or more will

Create the venn diagram, Create the Venn diagram: A   - you work for a...

Create the Venn diagram: A   - you work for an insurance company.  80% of your company's staff is sales force and 70% of your company's sales is force is male. in your company

Descriptive Statistics, To determine the proportion of people in your town ...

To determine the proportion of people in your town who are smokers, it has been decided to poll people at one of the following local spots: (a) the pool hall; (b) the bowling alley

Displacement of a simply supported beam, The displacement of a simply suppo...

The displacement of a simply supported beam subject to a uniform load is given by the solution of the following differential equation (for small displacements); and q is th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd