ECON 328 Jeopardy

Definitions

100

Another name for Y.

What is the dependent variable?

200

This is when the error term is correlated with the regressor of interest.

What is endogeneity?

300

The extent to which a causal relationship is justified.

What is internal validity?

400

This is when at least one regressor is a perfect linear combination of at least one of the other regressors.

What is perfect multicollinearity?

500

This when a problem can only be solved numerically.

What is no closed form solution?

Interpret

100

Interpret: Y_i = B₀+B₁X_i+u_i

What is the linear regression model with one regressor?

200

Interpret: B₁ = 2 when X and Y are continuous variables.

What is a one-unit in X yields a two-unit increase in Y?

300

Interpret B₁ = 3 in a multivariate model when X and Y are continuous variables.

What is a one-unit increase in X has an expected 3-unit increase in Y, holding all else equal?

400

Interpret: R²=0.70

What is the regressors explain 70% of the variance in Y?

500

Interpret: B₁ when Y is binary.

What is the change in the predicted probability that Y=1 associated with a unit change in X?

Mystery

100

The two conditions for omitted variable bias.

Corr(X,Z) != 0

Corr(u,Z) !=0

200

This is when the variance of the error term is constant over X.

What are homoskedastic errors?

300

This is how you would treat the null hypothesis at the 5% alpha level if your p-value is 0.02.

What is reject the null hypothesis?

400

The four key assumptions of OLS.

1. The conditional distribution of u_i given X_i is mean-zero

2. i.i.d.

3. Large outliers are unlikely

4. No perfect multicollinearity

500

The equation for adjusted R².

1-(n-1)/(n-k-1)*(1-R²)