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  • Econometrics Assignment 1

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    Adwik Rajesh
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    1. The document presents a multivariate regression framework to prove that the coefficient matrix is equal to 0. It shows that the coefficient matrix B is equal to the inverse of X'X multiplied by X'y minus X'X multiplied by the inverse of X'X multiplied by X'y. 2. It lists some biological and socioeconomic factors that can influence fertility rates such as health conditions, economic conditions, cultural norms, and individual choice. A simple linear regression may not fully capture the effect of variables due to potential correlations between factors. 3. It describes using a simulation to obtain predicted probabilities that are quite close to actual probabilities for a regression model.

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    ECONOMETRICS ASSIGNMENT 1

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    1. The document presents a multivariate regression framework to prove that the coefficient matrix is equal to 0. It shows that the coefficient matrix B is equal to the inverse of X'X multiplied by X'y minus X'X multiplied by the inverse of X'X multiplied by X'y. 2. It lists some biological and socioeconomic factors that can influence fertility rates such as health conditions, economic conditions, cultural norms, and individual choice. A simple linear regression may not fully capture the effect of variables due to potential correlations between factors. 3. It describes using a simulation to obtain predicted probabilities that are quite close to actual probabilities for a regression model.

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    © All Rights Reserved
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    4 views7 pages

    Econometrics Assignment 1

    Uploaded by

    Adwik Rajesh
    1. The document presents a multivariate regression framework to prove that the coefficient matrix is equal to 0. It shows that the coefficient matrix B is equal to the inverse of X'X multiplied by X'y minus X'X multiplied by the inverse of X'X multiplied by X'y. 2. It lists some biological and socioeconomic factors that can influence fertility rates such as health conditions, economic conditions, cultural norms, and individual choice. A simple linear regression may not fully capture the effect of variables due to potential correlations between factors. 3. It describes using a simulation to obtain predicted probabilities that are quite close to actual probabilities for a regression model.

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    © All Rights Reserved
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    of 7

    ① (a) Multivariate

    Regression framework
    (i) Prove that (i) X' = 0

    xi e
    :X-
    =
    xy -
    x'
    L

    notes know that


    from we

    B =
    (xx) " (x'x)

    xy -

    (xx)(X'x)" (Xx)
    -
    I

    x'y -

    X'X =
    0
    (I -

    x(X'x) x)(I x(Xx) x') -

    I- X(XX) "X' -
    x (X 1) X + X (Xx)" X x ( X' x ) x
    =

    I-2X(Xx) "X + X (x) xx) x


    I
    -

    F -
    X (X'x) " x
    x
    hence it is an
    idempotent matrix
    genetic
    ② (a) Biological factors : -
    Health conditions , fertility issues
    a
    ,

    Economic Reasons : -
    Economic conditions
    Social Reasons : -

    Cultural Norms ,
    Husband's opinion
    Individual characteristics : -

    personal choice

    Some
    factors like ,
    economic conditions ,
    medical facilities
    as well as awareness could creant to
    years of
    education while not
    other factors might .

    (b) A simple linear


    regression might not fully uncover
    the leteris paribls effect because of the potential O

    correlation of some factors covered in


    a to the numbers

    of years of education
    .

    Hence the estimated coefficient for education might


    be biased
    ↑

    ,
    due to omission
    of important factors
    not included in the model
    .
    affecting fertility
    simulation
    (d) Obtained pref through

    1 : 0 055109 .
    10 0555) .

    2 :
    - 277909
    0 (0 2777)
    .

    3 : 0 .
    388901 (0 3988)
    .

    * " 0 278081 (0 2777)


    .
    .

    The values show that the estimated and actual prof


    probabilities are
    quite close

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