ECON 710 Midterm: ECON 710 UW Madison Midterm 2006a

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31 Jan 2019
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Sample answers: the answer is v = c 1 v c 10. Note that since c is k k and full rank, = c 0 c, x i x 0 i e 2 i xix0 i e2 i c. 0 1: since e (yi | xi) = xi 1 + x2 i 2, then e (yi | xi = 40) = 40 1 + 402 2. H0 : 40 1 + 402 2 = 20 which is a linear restriction. H0 : 2 1 + 80 2 = 1. Let ( 1, 2) be the ols estimates of the coe cients, and let v denote the estimated asymptotic covariance matrix. The wald statistic for this hypothesis is where. R0 v r n 2 1 + 80 2 1 2. It has an asymptotic 2 exceeds the 5% 2. A 5% size test is to reject h0 if wn.

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