Helping the world grow since 2012
Call/WhatsApp/Text +1(838)201-9170

  • HOME
  • STUDY RESOURCES
  • ABOUT
    • About Apax Researchers
    • Why Do Students Use Us
    • Why Choose Us
    • Contact Us
  • BECOME A WRITER
  • BLOG
    Login
    Sign Up
    Helping the world grow since 2012
    Call/WhatsApp/Text +1(838)201-9170

    • HOME
    • STUDY RESOURCES
    • ABOUT
      • About Apax Researchers
      • Why Do Students Use Us
      • Why Choose Us
      • Contact Us
    • BECOME A WRITER
    • BLOG
    Login
    Sign Up
    Helping the world grow since 2012
    Call/WhatsApp/Text +1(838)201-9170

    • Write My Essay: Perfect Cheap Essay Writing Service for You
    • ABOUT
      • About Apax Researchers
      • Why Do Students Use Us
      • Why Choose Us
      • Contact Us
    • BECOME A WRITER
    • BLOG
    • QUESTIONS AND ANSWERS
    • LOGIN
    • SIGN UP

    Discuss an empirical example (different from lectures and seminars’ examples) of a linear regression model with endogeneity. Write the regression equation and provide details on the dependent and explanatory variables and on the interpretation of the coefficients. Explain the cause of endogeneity and why the ordinary least squares estimation would be inconsistent. More points will be given to realistic empirical examples with more than one explanatory variable and with an appropriate choice of explanatory variables.

    Question 1
    1,200 words limit
    (a) [25%]
    Discuss an empirical example (different from lectures and seminars’ examples) of a
    linear regression model with endogeneity. Write the regression equation and provide
    details on the dependent and explanatory variables and on the interpretation of the
    coefficients. Explain the cause of endogeneity and why the ordinary least squares
    estimation would be inconsistent. More points will be given to realistic empirical
    examples with more than one explanatory variable and with an appropriate choice of
    explanatory variables.
    (b) [25%]
    Explain how you would estimate your model in (1.a) using a two-stage least squares
    estimation and define the instrument(s) you would use. Provide details on how the
    two-stage least squares estimation is computed. Write the formula for the two-stage
    least squares estimation considering the model defined in point (1.a).
    (c) [15%]
    Explain what assumptions your instrumental variable(s) must satisfy to produce a
    consistent estimation of the model defined in point (1.a). Show that the instrumental
    variable estimation defined in (1.b) is consistent under these assumptions.
    (d) [15%]
    Explain how you would test for the validity of your instrumental variable(s). Explain
    also how you would test for whether there is an endogeneity issue in your model.
    Provide details on how you would perform these tests using the model defined in
    point (1.a).
    (e) [20%]
    Discuss potential drawbacks of the instrumental variable(s) you proposed in point
    (1.b). Discuss also what is the consequence of using an instrument whose effect on
    the endogenous variable conditional on the remaining control variables is not
    statistically very significant.

    Question 2
    1,200 words limit
    (a) [30%]
    Discuss an empirical example (different from lectures and seminars’ examples) of a
    panel data model where you would use a fixed effect estimation rather than a random
    effect estimation. Write the regression equation and provide details on the dependent
    and explanatory variables, on the error term and on the interpretation of the
    coefficients. Explain how you would compute the fixed effect estimation using your
    defined model.
    (b) [35%]
    Explain what the unobserved individual effects in the model defined in (2.a) capture.
    Explain the differences in the assumptions needed for the consistency of the fixed
    effect estimation and of the random effect estimation for the model you discussed in
    (2.a). Why is the fixed effect estimation more appropriate than the random effect
    Page 3 of 9
    Question continued overleaf
    estimation in the empirical example you discussed in point (2.a)? Explain how you
    would perform a test to decide whether to adopt a random effect or a fixed effect
    estimation.
    (c) [35%]
    Discuss an empirical example of a panel data model where one of the explanatory
    variables is endogenous because it is correlated with unobserved variables that are
    relevant to explain both the dependent variable and the endogenous variable. Explain
    under which conditions the fixed effect estimation can solve such an issue of
    endogeneity. Explain which type of estimation you would adopt to solve the
    endogeneity issue if the conditions for the consistency of the fixed effect estimation
    were not satisfied.

    Question 3
    1,200 words limit
    (a) [35%]
    Suppose that a researcher has information on the type of health insurance for a
    random sample of individuals. The researcher observes a categorical variable, insure,
    taking value 1 for individuals who choose an indemnity plan (a fee-for-service
    insurance), 2 for individuals who choose a prepaid plan (a fixed up-front payment with
    unlimited use) and 3 for individuals who are uninsured (uninsure). The researcher
    wants to analyse the demographic factors linked with the three choices of insurance
    and observes for each individual the following variables: age in years, male which is a
    dummy variable taking value 1 for men and 0 otherwise, and nonwhite which is a
    dummy variable taking value 1 for people who are not of white ethnicity and 0
    otherwise. Provide an interpretation of the results that are reported in Table 3.1
    below. Write down the model that the researcher has estimated. Explain how the
    estimation has been computed.

     

     

     

    ECO00005M Exam Paper2021

    CITATION

    Share
    GET A FREE QUOTE






      

    Why Choose US

    Affordability & Discounts
    Dedicated Support Team
    Timely Delivery
    Money Back Guarantee
    Zero Plagiarism
    Great discounts
    Top Writers
    Adherence to Instructions

    Recent Posts

    • Common App Essay Prompts
    • Transition Words: Examples and When and How To Use Them
    • Research Paper Topics
    • Best Argumentative Essay Topics
    • How to Write a Cover Letter

    If you need writing solution... We are available for you

    Place your order now and one of our writers will begin working on your assignment right away.

    Order NOW!

    From Our Blog
    • 0
      Common App Essay Prompts
      August 9, 2022
    • 0
      Research Paper Topics
      August 8, 2022
    Services
    • Research
    • Writing
    • Summary & Editing
    • Programming & Tech
    • Graphics & Design
    • Transcription
    • Digital Marketing
    • Lifestyle

    Social Media

    Subscribe here to get interesting stuff and updates!

    whatsapp Image
    Let's chat

    Copyright © 2020 Apax Researchers - All Rights Reserved.

    Legality

    Terms of Use