Answer to Question #155376 in Statistics and Probability for wondater muluneh

Question

1.    By taking one practical research problem please briefly discus about it in the perspective of methodology of econometrics?(5)

2.    Explain the differences between endogenity and autocorrelation? Under which circumstances is one most likely to encounter each of these problems? Explain in general, the procedure for dealing with each? Do these techniques have anything in common? Explain.(5)

3.    What estimation bias will occur using OLS if (4)

1. An endogenous variable is included in the model.
2. A relevant variable is excluded from the model.
3. The error terms are hetroscedastic?
4. How do you overcome these biases?

4.    Give an economic example where you could encounter simultaneity bias and show how you estimate it.(4)

5.    Give practical economic research objectives that fit with Probit/Logit  and tobit models and why? (7)

6.    Suppose your logit model output in analyzing factors affecting adoption of agricultural technology and found that the statistically significant and if the coefficient of income is 0.5, what does this mean?(5)

Answer 1

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