The Hausman test discussed in the text can also be conducted in the following way. Consider Eq.
Question:
The Hausman test discussed in the text can also be conducted in the following way. Consider Eq. (19.4.7):
Qt = β0 + β1Pt + β1vt + u2t
a. Since Pt and vt have the same coefficients, how would you test that in a given application that is indeed the case? What are the implications of this?
b. Since Pt is uncorrelated with u2t by design (why?), one way to find out if Pt is exogenous is to see if vt is correlated with u2t . How would you go about testing this? Which test do you use?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
a To test this we can apply the techniques from Section 87 for testing the equ...View the full answer
Answered By
Utsab mitra
I have the expertise to deliver these subjects to college and higher-level students. The services would involve only solving assignments, homework help, and others.
I have experience in delivering these subjects for the last 6 years on a freelancing basis in different companies around the globe. I am CMA certified and CGMA UK. I have professional experience of 18 years in the industry involved in the manufacturing company and IT implementation experience of over 12 years.
I have delivered this help to students effortlessly, which is essential to give the students a good grade in their studies.
2+ Reviews
10+ Question Solved
Related Book For 
Question Posted:
