Question

1. Which of the following is a reason for using independently pooled cross sections? a. To...

1. Which of the following is a reason for using independently pooled cross sections?



a.
To select a sample based on the independent variable



b.
To select a sample based on the dependent variable




c.
To increase the sample size



d.
To obtain data on same cross sectional unit

2. Idiosyncratic error is the error that occurs due to _____.

a.
incorrect measurement of an economic variable


b.
unobserved factors that affect the dependent variable and change over time

c.
correlation between the independent variables

d.
unobserved factors that affect the dependent variable and do not change over time

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Answer #1

1. Option a is correct

In pooled cross sectional data we collect data across different time period to select sample based on independent variable of different cross sectional units.

2. Option b is correct

Idiosyncratic error is unobserved factors that influence dependent variable and changes over time

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