¡¥pute the OLS estimate for the slope. Discuss the consequences of not including the constant term in the regression. Predict the Airline Travel consumption of a family whose annual Income is $65,000. Discuss whether you can measure the causal effect of ¡®Income¡¯ on ¡®Airline Travel.¡¯ Suppose that the true variance of the error term is known as. Test th¡¦
¡¥ard errors. Denoting the true slope parameter by, supp... / Midterm Exam for Econometrics (1):Fall 2013 Prof. Tae-Hwan Kim 1. [42 points] We consider using the variable ¡°Airline Travel¡± (i.e. how much we consume on airline travel) as our dependent variable ( ) and ¡°Income¡± (i.e. how much we earn) as the explanatory variable ( ).Suppose that the OLS re¡¦
¡¥rcept OLS estimator, (ii) the slope OLS estimator. Explain your reasoning. 2. [33 points] Consider; where and are vectors given by and we don¡¯t know if is normally distributed. Suppose that all the asymptotic assumptions are true. We are interested in the following null hypothesis:. You have learned that the asymptotic Wald statistic (given by) converges¡¦