Consider the following general model specification: ๐ = ๐ ( ๐ 1 , ๐ 2 , ๐ 3 ๐ 4 , ๐ 5 , ๐ 6 , ๐ 7 , ๐ 8 ) . Where the 9 variables are: Y = Test score of the mid-term exam X1 = Time spent studying for the exam X2 = Degree of course difficulty (measured by an index #) X3 = Class size (number of students) X4 = Experience/knowledge of the teacherย ย X5 = Studentโs college experience (college credits previously earned) X6 = Quantity of the studentโs outside (non-academic) activities X7 = Level of the studentโs determination to succeed (measured by an index #) X8 = Dummy (=1 if the course is face-to-face; 0 otherwise (online)) For each of the 2 cases of omitted variables below, determine the sign (positive/negative) of the bias โ you must complete columns 3, 4, and 5 in the table below.ย Case OM IN ๐ฝ ๐ ๐ ๐ผ 1 โ โ ๐ ๐ก BIAS 1 X5 X6 Sign is [ Select ] negative positive Sign is [ Select ] negative positive Bias is [ Select ] negative positive 2 X4 X1 Sign is [ Select ] negative positive Sign is [ Select ] negative positive Bias is [ Select ] negative positiveMultiple dropdown selections
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Question45 Consider the following regression of the logarithm of wages on age and an IQ score for a sample of US households: The estimated marginal effect of age on wages would suffer from omitted variables bias if there exists an additional excluded variable, say for instance productivity, which has an effect on wages there exists an additional excluded variable, say for instance productivity, which is correlated with age All of the above Any of the above None of the above ResetMaximum marks: 1 Flag question undefined
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When we regress y on x1, we obtain the following simple regression line: ๐ฆ ~ = ๐ฝ ~ 0 + ๐ฝ ~ 1 ๐ฅ 1 ย ย (1). When we regress y on x1 and x2, we obtain the following multiple regression line: ๐ฆ ^ = ๐ฝ ^ 0 + ๐ฝ ^ 1 ๐ฅ 1 + ๐ฝ ^ 2 ๐ฅ 2 ย (2). The relationship between ๐ฝ ~ 1 ย and ๐ฝ ^ 1 ย is: ๐ฝ ~ 1 = ๐ฝ ^ 1 + ๐ฝ ^ 2 ๐ฟ 1 ~ ย (3), where ๐ฟ 1 ~ ย is the slope coefficient of the regression of x2 on x1, ๐ฅ ~ 2 = ๐ฟ ~ 0 + ๐ฟ ~ 1 ๐ฅ 1 ย (4). Let y = ln(wage), x1 = educ, and x2 = exper, where wage is hourly wage (measured in dollars), educ is years of formal education, and exper is years of labor market experience. Assuming ๐ฝ ^ 1 , ๐ฝ ^ 2 > 0, which of the following statements is correct? ย
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