Please check all the answers that apply!!!!! Consider the following multiple reg
ID: 2931822 • Letter: P
Question
Please check all the answers that apply!!!!!
Consider the following multiple regression model Which of the following explains why two perfectly collinear regressors cannot be included in a linear multiple regressions? (Check all that apply) A For the case of two regressors and homoskedasticity it can be shown mathematically that he variance of the estimated coefficient 1 goes to infinity as the correlation between X1 and X2 goes to one. B. Intuitively, if one regressor is a linear function of another OLS cannot identify the partial effect of one while holding the other constant . Perfectly collinear regressors cannot be included in a linear multiple regression because it shrinks the estimated coefficients i 1 and p2 towards zero. D. None of the above are correct. Suppose you are interested in estimating the effect of the student-teacher ratio (STR) on test performance using the model TestScore-0 + 1 STR + u Which of the following regressors, if added to the model, would be perfectly collinear with STR? (Check all that apply) A. B. C. The number of teachers expressed as a percentage of the number of students. An indicator variable that equals one if a student is a native English speaker The student-faculty parking ratio, if every teacher has a parking spot. D. The teacher-security officer ratio if the student-security officer ratio is 1:10Explanation / Answer
Question 1
We cannot include two perfectly collinear regressors
because, Option A is correct as the variance of the estimaated coeficient goes to infinity as the coirrlation between X1 and X2 goes to one.
Option B is also correct as OLS cannot identify the partial effect of one while holding the other constant.
as X1 = a + b X2
Question 2.
(a) Option A is correct as it shows the percentage of number of students which is equaivalent to student -teacher ratioo.
(b) Not correct.
(C) Not correct.
(D) Correct. As it has the same Ratio as student - teacher ratio.
OPtion A and D are correct.