Question 1

The dependent variable is the outcome of interest.

Accepted Answer

The dependent variable is the variable that is being measured or observed and is the outcome of interest.

Question 2

X1 is the slope coefficient in the following model Y_i= B₀+ B₁X_1i+ e_i.

Accepted Answer

The text provided seems to be a mix of symbols and letters that do not form a coherent mathematical or statistical model, making it impossible to accurately determine if X1 is the slope coefficient without a clear, standard representation of the model.

Question 3

Y_i=B₀+10X_1i+e_i, a 10 unit increase in X1 is expected to lead to a 1 unit increase in Y.

Accepted Answer

The notation seems to represent a regression equation or formula, but without a clear, standard mathematical or statistical notation, it's difficult to interpret the exact relationship between variables X1 and Y. The statement about a 10 unit increase in X1 leading to a 1 unit increase in Y cannot be confirmed from the given expression.

Question 4

An independent variable is endogenous if changes in it are related to factors in the error term.

Accepted Answer

When an independent variable is endogenous, it means that its changes are influenced by factors that are not included in the model and are captured in the error term. This can lead to biased coefficient estimates and invalid statistical inferences.

Question 5

In randomized experiments we determine the value of the dependent variable via a random process.

Accepted Answer

In randomized experiments, the assignment of subjects to experimental and control groups is done via a random process, not the determination of the value of the dependent variable.

Question 6

What is the goal of a randomized experiment?&#10;A) To create exogeneity.&#10;B) To create endogeneity.&#10;C) To deal with problems of external validity.&#10;D) To increase sample size.

Accepted Answer

The goal of a randomized experiment is to create exogeneity, meaning that the treatment or intervention being studied is independent of any other factors that may affect the outcome. This allows for a valid causal inference to be made about the effect of the treatment.

Question 7

Which of the following are fundamental challenges when trying to infer relationships from data?&#10;A) Exogeneity&#10;B) Endogeneity&#10;C) Correlation&#10;D) Math

Accepted Answer

Endogeneity is a fundamental challenge in inferring relationships from data because it refers to situations where an explanatory variable is correlated with the error term in a regression model, which can lead to biased and inconsistent estimates.

Question 8

Assume that we are looking at the effect of education on wages, which of the following factors could most likely lead to endogeneity?&#10;A) Height&#10;B) Religion&#10;C) Number of siblings&#10;D) Intelligence

Accepted Answer

Intelligence can be correlated with both education and wages, leading to potential endogeneity. For example, individuals with higher levels of intelligence may be more likely to pursue higher education, which then leads to higher wages. Therefore, controlling for intelligence is necessary to isolate the effect of education on wages. Height, religion, and number of siblings, on the other hand, are unlikely to be related to both education and wages.

Question 9

Assume that we trying to explain infant mortality as a function of GDP per capita in a sample of countries from around the world. Which of the following factors could most likely lead to endogeneity?&#10;A) Whether the country has been at war&#10;B) Population size&#10;C) (Geographic) size of country&#10;D) Use of proportional representation system&#10;

Accepted Answer

Endogeneity could potentially be introduced by all of the factors listed, depending on the specific context and the way the variables interact. However, the factor that could most likely lead to endogeneity in this case is "Whether the country has been at war". This is because war can have a significant impact on both a country's GDP per capita and its infant mortality rate. War can disrupt economic activity, reducing GDP per capita, and it can also disrupt healthcare systems and increase the risk of disease and malnutrition, leading to higher infant mortality. Therefore, if we do not properly account for the impact of war in our model, we could end up with an endogeneity problem, where our error term is correlated with our independent variable (GDP per capita), leading to biased and inconsistent estimates.

Question 10

Given Income_i= 10 + 1.5Age_i+ e_i, interpret the model A) A one year increase in age is expected to lead to a 1.5 increase in income B) A 1.5 increase in age is expected to lead to a 1 increase in income C) A 1.5 increase in income is expected to lead to a 1 unit increase in age D) Income is 10

Accepted Answer

The model suggests that income (_{) is influenced by age (}), with a coefficient of 1.5. Therefore, a one year increase in age is expected to lead to a 1.5 unit increase in income. The "e" term in the model represents the error term, which reflects the unexplained variation in income that is not accounted for by age.

Question 11

Given GPA_i=1.0+0.001SAT_i+e_iwhat is the expected GPA of someone with an SAT score of 2000 A) 1.0 B) 1.001 C) 2000 D) 3.0

Accepted Answer

The answer of Given GPA_i=1.0+0.001SAT_i+e_iwhat is the expected GPA...

Question 12

Suppose we are trying to understand the effect of maternal smoking on the birthweight of newborn babies. Which of the following is not a likely source of endogeneity?&#10;A) Mother's health consciousness&#10;B) Tax rates on cigarettes&#10;C) Mother's education&#10;D) Father's smoking habits

Accepted Answer

The answer of Suppose we are trying to understand the...

Question 13

The error term&#10;A) Contains all other factors that affect the dependent variable.&#10;B) Contains all other factors that affect the independent variable.&#10;C) Contains all other factors that affect the intercept.&#10;D) Is a random variable with no relation to other variables.

Accepted Answer

The answer of The error term&#10;A) Contains all other factors...

Question 14

List and explain the three fundamental challenges in statistics.

Accepted Answer

The answer of List and explain the three fundamental challenges...

Question 15

Describe the basic process behind an experiment.

Accepted Answer

The answer of Describe the basic process behind an experiment....

Question 16

What is internal and external validity?

Accepted Answer

The answer of What is internal and external validity?...

Question 17

Imagine that you are looking at the relationship between income and level of education, list some of the factors that could lead to endogeneity.

Accepted Answer

The answer of Imagine that you are looking at the...

Question 18

Imagine that you are looking at the relationship between political affiliation and religion, list some of the factors that could lead to endogeneity.

Accepted Answer

The answer of Imagine that you are looking at the...

Deck 1: The Quest for Causality