Suppose that average worker productivity at manufacturing firms (avgprod) depends on two factors, average hours of training (avgtrain) and average worker ability (avgabil): augprod Bo + Biavgtrain + B2avgabil + u. = Assume that this regression satisfies assumptions MLR 1-4. If grants have been given to firms whose workers have less than average ability so that avgtrain and avgabil are negatively correlated. Which is the following is true regarding the estimated coefficient on avgtrain in the following regression avgprod=Bo + B₁avgtrain + u.

College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter1: Equations And Graphs
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Suppose that average worker productivity at manufacturing firms (avgprod) depends on two
factors, average hours of training (avgtrain) and average worker ability (avgabil):
augprod = Bo+Biavgtrain + B2avgabil + u.
Assume that this regression satisfies assumptions MLR 1-4. If grants have been given to firms
whose workers have less than average ability so that avgtrain and avgabil are negatively
correlated. Which is the following is true regarding the estimated coefficient on avgtrain in the
following regression
avgprod=Bo + B₁avgtrain + u.
Ounblased
blased upwards
biased downwards
undetermined.
Transcribed Image Text:Suppose that average worker productivity at manufacturing firms (avgprod) depends on two factors, average hours of training (avgtrain) and average worker ability (avgabil): augprod = Bo+Biavgtrain + B2avgabil + u. Assume that this regression satisfies assumptions MLR 1-4. If grants have been given to firms whose workers have less than average ability so that avgtrain and avgabil are negatively correlated. Which is the following is true regarding the estimated coefficient on avgtrain in the following regression avgprod=Bo + B₁avgtrain + u. Ounblased blased upwards biased downwards undetermined.
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