4. In which of the following cases OLS estimation of Healthcare=a+bAge+u will bebiased?a) Only include in your estimation sample individuals whose health care spending ismore than 500 per yearb) Use a random samplec) Healthcare is recorded with some random typing errors.1d) The error variance is larger at an older age.

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Asked Nov 4, 2019

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4. In which of the following cases OLS estimation of Healthcare=a+bAge+u will be
biased?
a) Only include in your estimation sample individuals whose health care spending is
more than 500 per year
b) Use a random sample
c) Healthcare is recorded with some random typing errors.
1
d) The error variance is larger at an older age. — Image Transcription
4. In which of the following cases OLS estimation of Healthcare=a+bAge+u will be biased? a) Only include in your estimation sample individuals whose health care spending is more than 500 per year b) Use a random sample c) Healthcare is recorded with some random typing errors. 1 d) The error variance is larger at an older age.

Expert Answer

Step 1

Explanation:

A random sample helps avoid unnecessary bias.

Random errors, such as random typing errors are accounted for, by the error term, “u” in the model.

Fluct...

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