Deck 1 - Foundations n Data

Question 1

what is cross-sectional data

Answer 1

observations on many units at a single point in time

Question 2

what is time-series data

Answer 2

observations on one unit across multiple time periods

Question 3

what is pooled cross-section

Answer 3

different cross-sections at different times (not the same units)

Question 4

what is panel data

Answer 4

repeated observations on the same units across time

Question 5

in the linear model y=β0+β1x+u what does u capture

Answer 5

all other (unobserved) factors affecting y with E(u|x)=0.

Question 6

interpret β0 (intercept) in a regression

Answer 6

predicted value of y when all regressors equal zero

Question 7

Interpret β1 (slope) in a regression

Answer 7

change in E[y|x] for a one-unit increase in x, holding others fixed

Question 8

What is the sample residual?

Answer 8

ûi=yi−ŷi (the part of yi not explained by the regressors)

Question 9

what is the population regression function (PRF) idea

Answer 9

The Population Regression Function (PRF) expresses the expected value of the dependent variable ( y ) given the independent variable(s) ( X ).

E[y|X]=Xβ and individual y deviates by u with E(u|X)=0

Question 10

Law of Iterated Expectations statement

Answer 10

The Law of Iterated Expectations says that the overall expected value of y can be found by first taking the expected value of y given X,and then taking the expected value of that result over X
E[y]=E_X{E[y|X]