PLEASE PAY ATTENTION TO CHECK ALL THAT APPLY Suppose you would like to draw a sa

Question

PLEASE PAY ATTENTION TO CHECK ALL THAT APPLY

Suppose you would like to draw a sample to study the effect of education on wage. Which of the following provides evidence against OLS assumption #32(Check all that apply) A. The years of education an individual can get is bounded above. B. The maximum wage an individual can get is a finite number. C. Half of the wages in the sample were incorrectly multiplied by 1 million when recorded. ? D. For some individuals in the sample, years of education were recorded in days rather than years

Explanation / Answer

A. The year of education an individual can get is bounded above.

It is the extream value and effects on the analysis. Hence, this evidence provided against OLS assumption.

B. The maximum wage an individual can get is a finite number.

Ans: This evidence does not provide against OLS assumption.

C. Half of the wages in the sample were incorrectly multiplied by 1 million when recorded.

Ans: If the incorrectly multiplied by 1 million can identify then this evidence does not provide against OLS assumption. Otherwise, it is.

D. For some individuals in the sample, years of education were recorded in days rather than years.  

Ans: If we can identify the individual and can correct then the evidence does not provide against OLS assumption. Otherwise, it is.

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