Obtain a consistent estimator of ß2 and prove it consistent

Reference no: EM131161134

The researcher in Exercise 10.3 discovers that last year's advertising budget, A(-1), is also an important determinant of A, so that the model is

S = β1 + β2A + uS
A = α1 + α2S + α3A(-1) + uA

Explain how this information could be used to obtain a consistent estimator of β₂, and prove that it is consistent.

Reference no: EM131161134

Questions Cloud

Investigate the direction of bias in the slope coefficient : described in Exercise 10.1, demonstrate that OLS would yield inconsistent results if used to fit the consumption function, and investigate the direction of the bias in the slope coefficient.

Compute a company-wide overhead rate using machine hours : Compute the departmental overhead rates using machine hours as the cost driver. Compute a company-wide overhead rate using machine hours as the cost driver.

Briefly summarize the journal article you found : How do the sources differ with respect to the type of information provided? In other words, what information can be gained from a literature review (textbook) versus a case study/research report (journal article)? On what points do the two sources..

How would this affect the fitting of the model : Suppose that A(-1) in Exercise 10.5 also has an influence on S. How would this affect the fitting of the model?Exercise 10.5

Obtain a consistent estimator of ß2 and prove it consistent : Explain how this information could be used to obtain a consistent estimator of β2, and prove that it is consistent.

Demonstrate that maximum likelihood estimator of p is m/n : Demonstrate that the maximum likelihood estimator of p is m/n.

Are social category valid basis for construction of personal : These cues include social categorization. Are social categories a valid basis for the construction of personal reality? Why or why not? How might the misinterpretation of social categorization cues lead to errant self-categorization and falsely sh..

Regress the logarithm of expenditure on your category : Regress the logarithm of expenditure on your category on LGDPI and the logarithm of the relative price series. Give an economic interpretation of the regression coefficients and perform appropriate statistical tests

Perform a box-cox test to determine difference in the fit : Perform a Box-Cox test to determine whether there is a significant difference in the fit of the linear and logarithmic regressions for your category of expenditure.

User Account

All Pages