(See graphs of Model A – D) The scatterplots show the estimated residuals plotted
against predicted values of the dependent variable. In which model is WLS LEAST
likely to be an effective solution for the heteroskedasticity?
a.) Model A
b.) Model B
c.) Model C
d.) Model D
If N is the number of individuals observed in each of T time periods, what is generally
true of a ‘short, wide” panel?
a.) T > N
b.) N > T
c.) N = T
d.) N1/2 < T2
Which of the following expressions is NOT equal to Æ©(yi – yÌ…)2 ?
a.) Ʃ(ŷi-y̅)2+ Ʃei2
b.) SSR + SSE
c.) SSR/SSE
d.) SST
How is the average marginal effect calculated for a probit or logit model?
a.) taking the marginal effect at the mean of the sample
b.) mean marginal effects are always .5 in a binary choice model
c.) calculate the marginal effects for each observation, then take the mean
d.) take the mean of the marginal effects at the 5th and 95th percentile
If L is the number of exogenous instruments and B is the number of endogenous
regressors in the model, when L < B the model is
a.) just identified
b.) over identified
c.) under identified
d.) perfectly identified
) In testing H0: = c using a .05 probability of a Type I error, you find a p-value of .
38. What should you conclude?
a.) H0 is true, = c.
b.) H0 should be rejected and is unlikely to be true since the p-value < .50.
c.) It is impossible to know for sure, but there is a .38 probability that = c.
d.) There is not sufficient evidence to reject H0, so we accept the hypothesis by default.
The following economic model predicts whether a voter will vote for an incumbent
school board member INCUMBENT = 1 + 2MALE + 3PARTY + 4MARRIED +
5KIDS
where
INCUMBENT = 1 if the voter votes for them, 0 otherwise,
MALE = 1 if the voter is a male,
PARTY indicates the voter is registered with the same political party as the incumbent,
MARRIED = 1 for married voters, 0 otherwise, and
KIDS is the number of school age kids living in the voter’s house.
How should we interpret 4?
a.) the likelihood the incumbent candidate is married
b.) the percentage of married voters who vote for the incumbent
c.) the probability a married person is registered to vote
d.) the difference in probability a married voter will vote for the incumbent as opposed
to an unmarried voter
When should a left-tailed significance test be used?
a.) When economic theory suggests the coefficient should be positive
b.) When it allows you to reject the null hypothesis at a lower p-value
c.) When economic theory suggests the coefficient should be negative
d.) When you know the true value of b2 is positive.
In 2SLS, how should the strength of an instrument be measured?
a.) an F-test on the first stage regression equation
b.) the p-value of the instrument’s coefficient in the second stage regression
c.) the R2 in the first stage regression equation
d.) an F-test on the second stage regression equation
When performing an F-test, if the null hypothesis is H0: 2= 3= 0 what is the
alternative hypothesis?
a.) 20 and 30
b.) 20 or b30
c.) ( 20 and 3=0) or ( 2 =0 and 30)
d.) ( 2 <0 and 3>0) or ( 2 >0 and 3<0)
Which of the following is not a reason random effects (RE) results may be preferred to
fixed effects (FE) ?
a.) RE accounts for the random sampling process that generated the data
b.) RE is a GLS estimator so in large samples it has a smaller variance than FE which is
a least squares estimator
c.) RE produces a coefficient for race, gender, or other individual characteristics that are
constant over time
d.) RE estimates are more robust in the case of endogenous regressors