If there were time effects in the model, would answers from part a through a d b
ID: 3153860 • Letter: I
Question
If there were time effects in the model, would answers from part a through a d be different? Explain. Consider the the linear probability model Y_i = beta_0 + beta_1 middot X_i + u_i, where P(Y_i = 1|X_i) = beta_0 + beta_1 middot X_1. Show that E[u|X_i = 0. Suppose that VAR [u_i [X_i = (beta_0 + beta_1 middot X_i) middot (1 - (beta_0 + beta_1 middot X_i)). Is u_t heteroskedastic? Why or why not? A long standing question of interest to economists who study education is how outcomes vary for students who attend private schools as compared to public schools. Some early work on this question focused on test scores, and compared students in Catholic high schools to students in public high schools, finding students at Catholic schools had significantly higher test scores. In a journal article, Evans and Schwab (1995) studied the effects of attending a Catholic high school on the probability of attending college.Explanation / Answer
b) V(u|x) is dependent on x.
for homosecdustic model the variance will be constant for all x, but here variance is dependent on x hence heterosecdustic.