An education economist estimated the wage equation to determine the rate of return to an additional year of education and obtained ln(WAGE) = -0.5220+0.1075×EDUC. it is anticipated that ability ( attributes, such as intelligence, creativity, perseverance and industriousness) is positively correlated with UDUC. If a measure of a bility is omitted from the model the estimated return to education A. Is biased downwards B. Is biased upwards C. Cannot be estimated D. All the above

An education economist estimated the wage equation to determine the rate of return to an additional year of education and obtained ln(WAGE) = -0.5220+0.1075×EDUC. it is anticipated that ability ( attributes, such as intelligence, creativity, perseverance and industriousness) is positively correlated with UDUC. If a measure of a bility is omitted from the model the estimated return to education A. Is biased downwards B. Is biased upwards C. Cannot be estimated D. All the above

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 1.3CE

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