Question 1

The dependent variable is the outcome of interest.

Accepted Answer

The dependent variable is the variable being studied and is the outcome or response of interest in a study or experiment.

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 what X1 represents without a clear, correctly formatted equation.

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

According to the given equation, a 10 unit increase in X1 is expected to lead to a (10*S1U1B11) unit increase in Y, which may or may not be equal to 1 unit. So, the statement is false.

Question 4

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

Accepted Answer

Endogeneity refers to the situation where an independent variable is correlated with the error term, which can bias the estimated coefficients and standard errors of the model. This can happen if there are unobserved variables that affect both the independent variable and the dependent variable, or if there are omitted variables that affect the independent variable. Endogeneity can lead to inconsistent and inefficient estimates, and requires special techniques such as instrumental variables or fixed effects to address.

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 randomly assigned and therefore unrelated to any other potential factors that could affect the outcome. This creates a more accurate causal relationship between the treatment and outcome.

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, potentially leading to biased and inconsistent estimates.

Question 8

An independent variable is endogenous if:&#10;A) It is correlated with another independent variable in the model.&#10;B) It is correlated with the error term.&#10;C) It is not correlated with the error term.&#10;D) If it is correlated with Y.

Accepted Answer

An independent variable is endogenous if it is correlated with the error term. This means that the independent variable is affected by other variables in the model and cannot be considered as truly exogenous. Therefore, its coefficient estimates may be biased and inconsistent, and the results of the analysis may not be reliable.

Question 9

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 may be endogenous since it could be influenced by factors such as education or one's upbringing, which would make it difficult to isolate the effect of education on wages.

Question 10

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 refers to a situation in which an explanatory variable is correlated with the error term in a regression model. This correlation can arise due to omitted variable bias, measurement error, simultaneity, or reverse causality. When trying to explain infant mortality as a function of GDP per capita, endogeneity can be introduced if there are factors that both affect infant mortality and are correlated with GDP per capita, but are not included in the model.
Let's consider the factors listed:
a. Whether the country has been at war: Being at war can have a significant impact on a country's infrastructure, healthcare system, and overall economic performance. Wars can lead to destruction of healthcare facilities, disruption of services, and economic instability, all of which can increase infant mortality. At the same time, wars can also affect a country's GDP per capita, as resources are diverted from productive uses to military spending, and economic activity may be disrupted. If the fact that a country has been at war is not included in the model, it could lead to endogeneity because it is likely to be correlated with both infant mortality and GDP per capita.
b. Population size: Larger populations might have different healthcare challenges and economies of scale that could affect infant mortality rates. However, population size is less likely to be correlated with GDP per capita in a way that would introduce endogeneity. GDP per capita is a measure that already accounts for population size by dividing the GDP by the number of people in the country.
c. (Geographic) size of the country: The geographic size of a country can influence the distribution of healthcare services and infrastructure, which can affect infant mortality. However, geographic size is not typically directly correlated with GDP per capita, and thus it is less likely to introduce endogeneity in the relationship between GDP per capita and infant mortality.
d. Use of proportional representation system: The type of political system, such as the use of proportional representation, can influence policy decisions, including healthcare policies that might affect infant mortality. However, the link between the use of proportional representation and GDP per capita is tenuous and less direct. It is less likely to be a source of endogeneity compared to other factors that have a more direct impact on both infant mortality and economic performance.
Among the factors listed, (a) Whether the country has been at war is the most likely to lead to endogeneity in the model explaining infant mortality as a function of GDP per capita. This is because war can directly affect both infant mortality rates and GDP per capita, and if not included in the model, it could bias the results.

Question 11

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 answer of Given Income_i= 10 + 1.5Age_i+...

Question 12

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 13

When an independent variable is exogenous&#10;A) It is correlated with the error term&#10;B) It is not correlated with the error term&#10;C) It is correlated with the slope&#10;D) It is not correlated with the slope

Accepted Answer

The answer of When an independent variable is exogenous&#10;A) It...

Question 14

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 15

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 16

List and explain the three fundamental challenges in statistics.

Accepted Answer

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

Question 17

Describe the basic process behind an experiment.

Accepted Answer

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

Question 18

What is internal and external validity?

Accepted Answer

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

Question 19

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 20

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