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Consider the following population model for household consumption: cons = a + B, • inc+ B, • educ + B3 • hhsize + u, where cons is consumption, inc is income, educ is the education level of household head, hhsize is the size of a household. 4. Suppose the data were collected through a telephone survey, and the last 4 digits of the households' telephone number was accidentally coded as something else and included in the regression. Denote the coefficient as Ba .We would expect O A. the OLS estimators B,, B2, B3, B4 are all more precise. B. OLS estimator B, is biased, but B,, B2, Bz are all unbiased. O C. the OLS estimators B,, B2, B3, B4 are all biased. O D. the OLS estimators B,, B2, B3, B4 are all unbiased.

Consider the following population model for household consumption: cons = a + B, • inc+ B, • educ + B3 • hhsize + u, where cons is consumption, inc is income, educ is the education level of household head, hhsize is the size of a household. 4. Suppose the data were collected through a telephone survey, and the last 4 digits of the households' telephone number was accidentally coded as something else and included in the regression. Denote the coefficient as Ba .We would expect O A. the OLS estimators B,, B2, B3, B4 are all more precise. B. OLS estimator B, is biased, but B,, B2, Bz are all unbiased. O C. the OLS estimators B,, B2, B3, B4 are all biased. O D. the OLS estimators B,, B2, B3, B4 are all unbiased.

Linear Algebra: A Modern Introduction
Linear Algebra: A Modern Introduction
4th Edition
ISBN:9781285463247
Author:David Poole
Publisher:David Poole
Chapter7: Distance And Approximation
Section7.3: Least Squares Approximation
Problem 31EQ
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Consider the following population model for household consumption: cons = a + B, • inc+ B, • educ + B3 • hhsize + u, where cons is consumption, inc is income, educ is the education level of household head, hhsize is the size of a household. 4. Suppose the data were collected through a telephone survey, and the last 4 digits of the households' telephone number was accidentally coded as something else and included in the regression. Denote the coefficient as Ba .We would expect O A. the OLS estimators B,, B2, B3, B4 are all more precise. B. OLS estimator B, is biased, but B,, B2, Bz are all unbiased. O C. the OLS estimators B,, B2, B3, B4 are all biased. O D. the OLS estimators B,, B2, B3, B4 are all unbiased.
Transcribed Image Text:Consider the following population model for household consumption: cons = a + B, • inc+ B, • educ + B3 • hhsize + u, where cons is consumption, inc is income, educ is the education level of household head, hhsize is the size of a household. 4. Suppose the data were collected through a telephone survey, and the last 4 digits of the households' telephone number was accidentally coded as something else and included in the regression. Denote the coefficient as Ba .We would expect O A. the OLS estimators B,, B2, B3, B4 are all more precise. B. OLS estimator B, is biased, but B,, B2, Bz are all unbiased. O C. the OLS estimators B,, B2, B3, B4 are all biased. O D. the OLS estimators B,, B2, B3, B4 are all unbiased.
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