Assume that for the T = 2 time periods case, you have estimated a simple regression in changes model and found a statistically significant positive intercept. This implies
A)a negative mean change in the LHS variable in the absence of a change in the RHS variable since you subtract the earlier period from the later period
B)that the panel estimation approach is flawed since differencing the data eliminates the constant (intercept)in a regression
C)a positive mean change in the LHS variable in the absence of a change in the RHS variable
D)that the RHS variable changed between the two subperiods

Question

Quizplus · Accepted Answer

A positive intercept in a simple regression in changes model implies a positive mean change in the LHS variable in the absence of a change in the RHS variable. This means that even without a change in the explanatory variable, the dependent variable showed a positive trend over time.

Assume That for the T = 2 Time Periods Case