Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3. We have 6 assumptions for our OLS regressions: (i) the Population Model; (ii) Random Sampling; (iii) No Perfect Collinearity (iv) Mean Independence; (v) homoskedasticity;

image text in transcribed
3. We have 6 assumptions for our OLS regressions: (i) the Population Model; (ii) Random Sampling; (iii) No Perfect Collinearity (iv) Mean Independence; (v) homoskedasticity; and (vi) Normally distributed errors. (a) Formally write out our mean-independence assumption for the disturbance u over the explanatory variables (21, ..., Jk) (b) What is the minimal set of the above assumptions that we require in order to show that our slope coefficients are unbiased? (c) Which assumptions do we need in order to conduct inference using classical t and F tests if we have a small sample? (d) If we have a very large sample, which of the above assumptions are necessary for asymptotic t and F tests

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

What Every Environmentalist Needs To Know About Capitalism

Authors: Fred Magdoff, John Bellamy Foster

1st Edition

1583672419, 9781583672419

More Books

Students also viewed these Economics questions

Question

What is your greatest strength?

Answered: 1 week ago

Question

4. What is the goal of the others in the network?

Answered: 1 week ago

Question

2. What we can learn from the past

Answered: 1 week ago