What benefit is gained by estimating treatment effects with fixed effects using panel
data?
a.) it controls for unobserved, individual characteristics
b.) it controls for changes in individuals over time
c.) it allows the treatment effect to vary with the length of treatment
d.) it “fixes” the treatment to the same time for each individual
The following Mincer equation has been used to estimate wages:
ln (Y) = ln (Yo) + 2EDU + 3EXPER + 4EXPER2 + e
where Y is income, Y0 is income of someone with no education or experience, EDU is
years of education and EXPER is experience in the field. If you suspect males earn
higher wages than females and that the wage difference increases with education how
would you adjust the econometric model to estimate wages?
a.) include a binary variable for gender, MALE
b.) include an interaction term equal to MALE* EXPER
c.) include an indicator variable for MALE and one for FEMALE
d.) include a binary variable for MALE and an interaction term equal to MALE *
EXPER
Which of the following measures is NOT used to evaluate model specification?
a.) adj R2
b.) Akiake Information Criterion (AIC)
c.) Bayesian Information Criterion (BIC)
d.) Jarque-Bera Test
In a system of 4 simultaneous equations, how many endogenous variables must be
excluded from an equation in the system for the parameters to be identified?
a.) 1
b.) 2
c.) 3
d.) 4
A model with the following conditional variance function is what type of model?
ht= 0+1e2
t-1 + 2e2
t-2 + 3e2
t-3
a.) ARCH(3)
b.) ARDL(2)
c.) ARDL(3)
d.) VAR
Randomized, controlled experiments are needed to accurately measure treatment effects
without
a.) the expense of having to treat everyone.
b.) the risk of discrimination bias.
c.) exposing everyone to untested treatments.
d.) selection bias.
What is the difference between multinomial logit and conditional logit?
a.) conditional logit allows for variables to vary by individual and choice while
multinomial logit only allows them to vary by individual
b.) multinomial logit allow for 3+ choices, conditional logit only accommodates 2
c.) multinomial logit is estimated with least squares, conditional logit by maximum
likelihood
d.) multinomial logit has different coefficients for each choice equation, conditional
logit has equal coefficients across choice equations on common variables
How do you interpret the estimated value of g2 in the following equation:
where INCOME is annual household income (in thousands) and ENT_EXP is annual
entertainment expenses? a.) the income elasticity of entertainment
b.) .) when multiplied by 100 it is the percentage increase in entertainment expenses
associated with an additional $1000 in income
c.) the increase in entertain expenses associated with a 1% increase in income
d.) the average of the logarithm of entertainment expenses for a household with zero
income
Why does the denominator of need to be the same as the degrees of freedom in the
model?
a.) so we will know how the estimate is distributed if Ho is true
b.) so we can extrapolate the results to other values of x
c.) so that the root MSE will be a positive number
d.) so the estimator will be unbiased
Which of the following is not a desirable characteristic in an instrumental variable, z, to
be used in IV/2SLS estimation?
a.) cov (z,e) = 0
b.) z is unrelated to y
c.) high correlation between z & x
d.) normally distributed z
A stochastic process is best described as
a.) deterministic
b.) theoretical
c.) random
d.) mean reverting
When testing hypotheses of probit or logit coefficients, what 2 statistical tests are
generally used?
a.) Wald and Likelihood Ratio
b.) z-test and t-test
c.) LM and Hausman
d.) F-test and R2
A linear probability model is likely to violate which assumption of MR most of the
time?
a.) The values of each xik are not random and are not exact linear functions of the other
explanatory variables
b.) var(yi.) = var(ei) = 2
c.) E(yi) = 1 + 2xi2 + 3xi3 + ‘¦’¦. + kxik, <=> E(ei) = 0
d.) cov(yi, yj) = cov(ei, ej) = 0; (i≠j)
When should the Hausman-Taylor estimator be used?
a.) when a RE model has some endogenous regressors
b.) when FE is statistically insignificant
c.) when you do not have any information as to which regressors are endogenous
d.) when you want to estimate RE on a long, narrow data set
When estimating a VEC model using a two step least squares process, what is the first
step?
a.) use least squares to estimate the cointegrating relationship
b.) use least squares to estimate first differences as a function of estimated residuals
c.) use least squares to estimated residuals as a function of first differences
d.) use least squares to estimate first differences as a function of lagged differences
Which of the following is an ARDL (1,3) model?
If your initial econometric model has heteroskedastic error terms, which estimator
allows unbiased coefficient estimates without imposing a structure on the
heteroskedasticity?
When two or more variables move together in systematic ways they are said to be
________________?
How would you write the following expression using summation notation?
Q1 + Q2 + Q3 + Q4 + …….. + Q29
) Which of the following cannot be an alternative hypothesis?
) For which alternative hypothesis do you reject H0 if |t| =<t a/2,N-2)?
What about the distribution of a random variable does kurtosis measure?
Which of the following is an AR(3) model?
Which of the following leads to large forecast errors?
When the residuals from a simple regression model appear to be correlated with x, this
is known as_______________________________.