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5. (8 points) In empirical studies of students' educational performance, the usual finding is that parental inputs, but not school inputs, matter. Suppose the truth
5. (8 points) In empirical studies of students' educational performance, the usual finding is that parental inputs, but not school inputs, matter. Suppose the truth is that both inputs do matter, but it is just that the usual OLS estimation somehow misses the impacts of school inputs on students' educational performance but manages to capture the impacts of parental inputs. Use the Ballentine diagram to illustrate how this might happen. Explain why the sizes of the various circles and the extent to which they overlap in your diagram are reasonable depiction of reality
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