The appropriate time average of {y_it} is , where T_i is: A)the dummy variable, which equals one when a complete set of data is observed. B)the total number of time periods for cross-sectional observation i. C)the total number of complete time periods for cross-sectional observation i. D)the explanatory variable for cross-sectional observation i.

Question

Quizplus · Accepted Answer

The time average of a variable is the average value of the variable over time. The denominator of this average should represent the total number of time periods for which data is available. Option C is the only choice that provides the appropriate denominator for a time average. Option A refers to a dummy variable, which does not give us any information about the time periods. Option B is the total number of time periods but not the complete ones, and option D refers to an explanatory variable, which is not relevant for calculating the time average.

The Appropriate Time Average of {Yit} Is​ , Where

The Appropriate Time Average of {Y_it} Is , Where