Answer Happy

iv In a study on undergraduate student grades in econometrics, the students are asked how many hours they spend each week on five activities: studying, attending lectures, sleeping, working and leisure. Any activity is put into one of five categories, so that for each student, the sum of hours in the five activities must be 168. Does the following model satisfy the Gauss Markov assumptions of multiple linear regression? grade; = Bo+B studyi+Belectures;+Bzsleepi+B worki+B5leisure;+u; (2) v You are interested in estimating the sum of parameters on study and lectures, 8 = B1 + B2. What assumptions do you need for the estimator of 8 to be unbiased? vi What is the Var(Ô)? vii Suppose you are considering including an additional explanatory factor: age. How would you calculate the variance of the error term in the model that includes age and in the model that excludes age? viii Does excluding age have any effect on B3, the coefficient of sleep?
n ix Suppose lectures; is measured in minutes as opposed to hours. Does this change the value of ß,? Explain. x If you have n = 300 observations, what are the degrees of freedom of your regression? xi Suppose you introduce In (family income) and In (family income)? into the model. How would you interpret the partial effect of family income on grade? xii Suppose you have data for several cohorts of students over several years. In some years a lecturer strike happened during term time. Would you consider the variable strike a suitable instrumental variable for lectures? Explain.