Consider the following model of scores for students on a three year long economics degree: scoret...

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Consider the following model of scores for students on a three year long economics degree: scoret Bo + Battendance + B₂jobit + B3hoursit + Ui. Here score it is the ith student's overall score (out of 100) for the course in the tth year of the degree, attendance it is the percentage of classes they attended in the given year, jobit is a dummy variable indicating whether the student has a part-time job or not in the tth year of the degree, and hoursit is the number of hours they spend studying for the course per week outside of classes. (a) Explain whether you think the model could be improved by adding any other vari- ables. [6 MARKS] (b) Why might fixed effects be a problem in the context of this regression? [6 MARKS] (c) Outline how a fixed effects model might be used to estimate the parameters of the model and overcome any problems you outlined in (b). Consider the following model of scores for students on a three year long economics degree: scoret Bo + Battendance + B₂jobit + B3hoursit + Ui. Here score it is the ith student's overall score (out of 100) for the course in the tth year of the degree, attendance it is the percentage of classes they attended in the given year, jobit is a dummy variable indicating whether the student has a part-time job or not in the tth year of the degree, and hoursit is the number of hours they spend studying for the course per week outside of classes. (a) Explain whether you think the model could be improved by adding any other vari- ables. [6 MARKS] (b) Why might fixed effects be a problem in the context of this regression? [6 MARKS] (c) Outline how a fixed effects model might be used to estimate the parameters of the model and overcome any problems you outlined in (b).

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General Guidance The answer provided below has been developed in a clear step by step manner Step 1 of 3 a The model could be improved by adding other ... View the full answer