Instrumental Variables 2 points possible (graded, results hidden) However, there is a problem. The medical expenses of a
Posted: Sun Oct 03, 2021 11:28 am
Instrumental Variables
2 points possible (graded, results hidden)
However, there is a problem. The medical expenses of an
individual apparently depend on whether or not they have health
insurance. At the same time, it is more likely that people would
choose to obtain health insurance if their medical expenses are
high; hence whether an individual is covered by health insurance is
also affected by the medical expenses. Because of the causality can
go in both directions, the linear model above cannot be estimated
by an OLS directly.
Which of the following best describes the problem as mentioned
above?
Heteroskedasticity
Omitted Variable Bias
Endogeneity
Selection Bias
2 points possible (graded, results hidden)
However, there is a problem. The medical expenses of an
individual apparently depend on whether or not they have health
insurance. At the same time, it is more likely that people would
choose to obtain health insurance if their medical expenses are
high; hence whether an individual is covered by health insurance is
also affected by the medical expenses. Because of the causality can
go in both directions, the linear model above cannot be estimated
by an OLS directly.
Which of the following best describes the problem as mentioned
above?
Heteroskedasticity
Omitted Variable Bias
Endogeneity
Selection Bias