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Consider the following equations designed to estimate a school's test scores (Test) and the school's dropout rate (Drop).
Testi = B0 + B1*Parent Edi + B2*school qualityi + B3*Dropi + Ei
Dropi = a0 + a1*Parent Edi + a2*school qualityi + a3*Testi + Vi
a. Use the order condition to determine if these equations are exactly identified, under-identified, or over-identified (the intuitive version is fine).
b. Suppose another variable (teenage unemployment) is available and is thought to affect dropout rates but not test scores. How will your answer to part (a) change if this unemployment variable is included in the dropout equation?
c. Explain intuitively why OLS will be biased if the equations are estimated separately.
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what are the uses of correlation in economics?
Females, it is said, make 70 cents to the dollar in the United States. To investigate this phenomenon, you collect data on weekly earnings from 1,744 individuals, 850 females and
Replicate the estimations in Table 2 on page 82 of Graddy (1995), but excluding the data of King Whiting.
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Can you explain the basic introduction of this methodology?
cost function; expenditure=B1+B2N+B3N+U EXP=17099+1.60N-1.2Q regration sum of square=8 qutinos 1 explain inter prtation
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