ECO327Y5 Study Guide - Midterm Guide: Statistical Inference, Asymptotic Analysis, Continuous Or Discrete Variable
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5. 1 write y = x1 + u, and take the expected value: e(y) = X since e(u) = 0, where y = e(y) and x = e(x1). Taking the plim of this we have plim( X, where we use the fact that plim( ) = x by the law of large numbers, and plim( We have also used the parts of property. 5. 2 a higher tolerance of risk means more willingness to invest in the stock market, so. By assumption, funds and risktol are positively correlated. , so has a positive inconsistency (asymptotic bias). This makes sense: if we omit risktol from the regression and it is positively correlated with funds, some of the estimated effect of funds is actually due to the effect of risktol. = 2. 87 + . 599 educ + . 022 exper + . 169 tenure (0. 73) (. 051) (. 012) (. 022) n = 526, r2 = . 306, Below is a histogram of the 526 residual,
