Midterm practice

Question 1

A statistical analysis is externally valid if

Answer 1

Its inferences and conclusions can be generalized from the population and setting studied to other populations and settings.

Question 2

A statistical analysis is internally valid if

Answer 2

the statistical inferences about causal effects are valid for the population being studied

Question 3

Sample selection bias occurs when

Answer 3

the availability of the data is influenced by a selection process that is related to the value of the dependent variable

Question 4

Simultaneous causality

Answer 4

leads to correlation between the regressos and the error term

Question 5

Possible solutions to omitted variable bias, when the omitted variable is no observed, include the following with the exception :

Answer 5

1. panel data estimation
2. nonlinear least squares estimation
3. use of instrumental variables regressions
4. use of randomized controlled experiments
   2) ))

Question 6

Estimation of the IV regression model:

Answer 6

requires exact identification or over-identification

Question 7

The conditions for a valid instruments do not include the following:

Answer 7

A) each instrument must be uncorrelated with the error term

B) each one of the instrumental variables must be normally distributed

C) perfect multicollinearity in exogeneous variables must be ruled out

D) perfect multicolilnearity between the predicted endogenous variables and the exogeneous variables must be ruled out

B)))))))

Question 8

A heuristic method for checking for weak instruments is as follows: for the case of a single endogenous regressor,

Answer 8

A first stage F< 10 indicates that the instruments are weak

Question 9

The distintion between endogenous and exogeneous variables is

Answer 9

whether or not the variables are correlated with the error term

Question 10

Instrument relevance

Answer 10

means that some of the variance in the endogeneous regressor is related to variation in the instrument

Question 11

The following does not represent a threat to internal validity of randomized controlled experiments:

Answer 11

1. Attrition
2. failure to follow the treatment protocol
3. experimental effects
4. a large sample size
5. ……

Question 12

The Hawthorne effect refers to

Answer 12

• The phenomenon that subjects in an experiment can change their behavior merely by being included in the experiment