Question

1. State if each of the following statements is true or not, and BRIEFLY give your rea- soning. (3 sentences maximum for each question) (g) By pooling two or more cross sections from the same population we have more powerful tests. (3 marks) (h) The random effects estimator is also called the "within" estimator. (2 marks) (i) The sample mean used in the time-demean transformation is the sample mean for the tth time across all cross section units, rather than the overall sample mean. (3 marks) (G) Regressors that are time-invariant for every member of the cross section cannot be included in a regression equation which one wishes to estimate by the first difference (FD) estimator (3 marks)

Answer 1

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