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The following 10 observations on wheat yields (y) in tons per ha were recorded from a field exper- iment: 6.3, 8.1, 7.9, 8.4, 7.3,

 

The following 10 observations on wheat yields (y) in tons per ha were recorded from a field exper- iment: 6.3, 8.1, 7.9, 8.4, 7.3, 6.6, 7.0, 7.1, 8.3, 6.9. (a) Suppose that you wish to estimate the mean yield of the population according to the model y = + . You are willing to assume that the errors follow the moment condition E[e] = 0. Please set up the sample analogue of this moment condition and solve for the unknown parameter. (b) Now, somebody tells you that the different yields are partially due to different Nitrogen appli- cations (r) in kg/ha. Following the same sequence of fields, they were 122, 182, 184, 190, 155, 135, 145, 143, 185, 140. Therefore, you would like to estimate the model y = Bo + Bizi + ei using in addition the moment condition E[re;] = 0 and solving both sample analogues of the moment conditions for the two unknown parameters. (e) In a more general term, consider a linear multivariate model: y = XB + e, where we make the assumption that the explanatory variables are exogenous, i.e. Exe] = 0. Demonstrate that the Method of Moments estimator for 3 based on these moment conditions is equivalent to the OLS estimator.

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a The sample analogue of the moment condition is yi 0 Solving for we get 1nyi 11063 81 79 84 7... blur-text-image

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