Consider a regression with two variables,in which X1i is the variable of interest and X2i is the control variable.Conditional mean independence requires
A)E(ui|X1i,X2i)= E(ui|X2i)
B)E(ui|X1i,X2i)= E(ui|X1i)
C)E(ui|X1i)= E(ui|X2i)
D)E(ui)= E(ui|X2i)

Question

Quizplus · Accepted Answer

Conditional mean independence requires that the conditional expectation of the error term given the variable of interest (X1i) and the control variable (X2i) is equal to the conditional expectation of the error term given only the control variable (X2i). Therefore, choice A is the correct answer.

Consider a Regression with Two Variables,in Which X1i Is the Variable