In an effort to improve on-campus sales, Chicken Lou’s asks you to help them con
ID: 3173411 • Letter: I
Question
In an effort to improve on-campus sales, Chicken Lou’s asks you to help them conduct a survey of X University students. For each student you survey, you ask for information about their sex, race, whether or not they are a first-year student, their current GPA, and how many times they have eaten at Chicken Lou’s in the past 6 months. You spend a week handing out surveys to students on the corner of Huntington Avenue and Forsyth (right near Chicken Lou’s).
Suppose you plan to run a regression examining the impact eating Chicken Lou’s has on a student’s GPA, which takes the following form:
gpai = 0 + 1*CLoui + 2* firstyeari + 3*sexi + 4*blacki + µi
Where:
gpa = the student’s current cumulative GPA at X University
CLou = the number of times student i ate at Chicken Lou’s in the past six months
firstyear = 1 if student i is a first-year student and 0 otherwise
sex = 1 if student i is female and 0 if male
black = 1 if student i is black and 0 otherwise
A. At the end of the week, you begin analyzing the data and notice that age, race, and sex each have some missing entries. Under what conditions would this pose and not pose a problem for your estimation?
B. Will you be able to obtain reliable estimates with CLou as an independent variable? Why or why not?
Explanation / Answer
A. The missing values for age race and sex are going to pose a problem in the estimation, as it is going to be the case of not a first year, male and not a black person. If missing rate is less, then there is not much problem in the overall error
Also if beta values of age, sex and race are less, then there is a chance of less error for the missing observations
B. The answer is as explained in the above question itself. If the missing rate in the data is very less for these variables, then we can rely only on CLou, but if it is good enough missing rate, then this would over estimate or underestimat the value of gpa
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