Briefly identify the following in words or equations as appropriate:
(a) The major consequence of including an irrelevant variable in a regression equation.
(b) Four valid criteria for determining whether a given variable belongs in an equation.
(c) The problem with sequential specification searches.
(d) The elasticity of Y with respect to X in:
$\ln Y = \beta _ { 0 } + \beta _ { 1 } \ln X + \varepsilon$ (e) The sign of the bias on the coefficient of age caused by omitting experience in an equation explaining the salaries of various workers.

Question

Briefly identify the following in words or equations as appropriate:
(a) The major consequence of including an irrelevant variable in a regression equation.
(b) Four valid criteria for determining whether a given variable belongs in an equation.
(c) The problem with sequential specification searches.
(d) The elasticity of Y with respect to X in:
 $\ln Y = \beta _ { 0 } + \beta _ { 1 } \ln X + \varepsilon$ (e) The sign of the bias on the coefficient of age caused by omitting experience in an equation explaining the salaries of various workers.

Quizplus · Accepted Answer

The Answer is (a) See Section 6.2.
(b) See Section 6.2.
(c) See Section 6.4.
(d) Constant =

\beta

₁.
(e) Positive, since the expected sign of the coefficient of experience is positive and since the simple correlation coefficient between age and experience is positive. See Section 6.1.3.

Briefly Identify the Following in Words or Equations as Appropriate ln⁡Y=β0+β1ln⁡X+ε\ln Y = \beta _ { 0 } + \beta _ { 1 } \ln X + \varepsilonlnY=β0​+β1​lnX+ε

Briefly Identify the Following in Words or Equations as Appropriate $\ln Y = \beta _ { 0 } + \beta _ { 1 } \ln X + \varepsilon$