Why do we includé à disturbănčé těrm in à regression model? (1). Some determinants of the independent variable may be omitted or left out. (II). There may be measurement errors of the dependent variables that cannot be modelled. (III). There may be random influences on the independent variable which cannot be modelled ea a burricane a co mputer failure
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- Differentiate between deterministic or stochastic models?In the context of a controlled experiment, consider the simple linear regression formulation Yi = β0 + β1Xi + Ui. Let the Yi be the outcome, Xi the treatment level when the treatment is binary, and Ui contain all the additional determinants of the outcome. Then: a. the OLS estimator of the slope will be inconsistent in the case of a randomly assigned Xi since there are omitted variables present. b. Xi and Ui will not be independently distributed if the Xi are randomly assigned. c. β0 represents the causal effect of X on Y when X is zero. d. E(Y|X= 1) is the expected value for the treatment group. e. All of the above. f. None of the above.A study looking for determinants of exclusive breastfeeding. To get the chance, we have to look from the research that has been done before or from the literature. From the results of previous studies in the "ABC" area, the proportion of infants who were exclusively breastfed was around 17.2%. With the limit of error set at 5% and the value of = 0.05. Please help me to find the minimum sample size needed for the research.
- What are the possible outcomes in testing a hypothesis? What are the determinant factors in deciding the critical value(s) in testing a hypothesis?A researcher analyzing the determinants of earnings and she has data on 16 occupation categories that exhausts all possibilities. If the researcher runs a regression of earnings on a binary (dummy variable) for all 16 categories, which least-square assumption is violated?For the horseshoe crab data with width, color, and spine as predictors, suppose you start a backward elimination process with the most complex model possible. Denoted by C ∗ S ∗ W, it uses main effects for each term as well as the three two-factor interactions and the three-factor interaction. Table 5.9 shows the fit for this model and various simpler models d.Finally, compare the working model at this stage to the main-effects model C + S + W. Is it permissible to simplify to this model? e. Of the models shown in the table, which is preferred according to the AIC?
- What is the significance of R and R2 in gression model?Suppose that you want to analyse the determinants of the murder rate in the United Kingdom using the following model: Murderrt = β0 + β1Convict + β2Unempt + β3Ymalet + ut where Murderrt is the number of murders per 100,000 persons during year t, Convic is the murder conviction rate, Unemp is the national unemployment rate, and Ymale is the fraction of males aged between 18 and 25. Data for all the variables are available for 25 years. a) You estimate this model using the OLS estimator. Explain the properties of the OLS estimator, β 1 ^, and the estimator of the variance, Var(β 1 ^), if the error term ut is serially correlated. b) You suspect the presence of the AR (1) serial correlation in the error term ut and decided to test for it using the Breusch-Godfrey test. State the null hypothesis for the Breusch-Godfrey test. c) Eviews gave you the F-statistic of 8.21 for the Breusch-Godfrey test. Do you reject the null hypothesis? Explain why or why not. If you did find evidence of serial…why is the covariance of a deterministic and a stochastic process 0? This relats to Arithmetic Bronian Motion
- One can use the equations of the Markowitz model to derive the CAPM equation. At thispoint, one would be wrong to conclude that this is the CAPM model. What additional argumentis necessary to make the transition from one model to the other?a. All other options are necessary.b. There is a single investor who holds the mean-variance efficient portfolio.c. There is at least one investor who holds the market portfolio.d. Investors know the returns and standard deviations of all securities in the economy.A possible important environmental determinant of lung function in children is the amount of cigarette smoking in the home. Suppose this question is studied by selecting two groups: Group 1 consists of 23 nonsmoking children 5−9 years of age, both of whose parents smoke, who have a mean forced expiratory volume (FEV) of 2.1 L and a standard deviation of 0.7 L; group 2 consists of 20 nonsmoking children of comparable age, neither of whose parents smoke, who have a mean FEV of 2.3 L and a standard deviation of 0.4 L. A) What are the appropriate null and alternative hypotheses to compare the means of the two groups? B) What is the appropriate test procedure for the hypotheses in Problem A? C) Carry out the test in Problem B using the criticalvalue method. D) Provide a 95% CI for the true mean difference in FEV between 5- to 9-year-old children whose parents smoke and comparable children whose parents do not smoke.A possible important environmental determinant of lung function in children is the amount of cigarette smoking in the home. Suppose this question is studied by selecting two groups: Group 1 consists of 23 nonsmoking children 5−9 years of age, both of whose parents smoke, who have a mean forced expiratory volume (FEV) of 2.1 L and a standard deviation of 0.7 L; group 2 consists of 20 nonsmoking children of comparable age, neither of whose parents smoke, who have a mean FEV of 2.3 L and a standard deviation of 0.4 L.8.31 What are the appropriate null and alternative hypotheses to compare the means of the two groups?8.32 What is the appropriate test procedure for the hypotheses in Problem 8.31?8.33 Carry out the test in Problem 8.32 using the criticalvalue method.8.34 Provide a 95% CI for the true mean difference in FEV between 5- to 9-year-old children whose parents smoke and comparable children whose parents do not smoke.8.35 Assuming this is regarded as a pilot study, how many children…