What is meant by identification in a simultaneous equation model? Check the identification status of the equations in the following model:
Demand function:
Supply function:
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What is meant by identification in a simultaneous equation model? Check the identification status of the equations in the following model:
Demand function:
Supply function:
What algebraic properties do the estimators fulfil?
Explain why an error term is added to the regression model. What assumptions are made about the error term? What are the implications of such assumptions? What will happen to the estimators of the parameters of the regression model, if these assumptions are violated?
What is meant by heteroscedasticity? What are its consequences? How do you detect the presence of heteroscedasticity in a data set?
Explain how estimators of a and ẞ can be obtained.
Consider the regression equation where u is a stochastic error term.
While estimating a regression model you found that the explanatory variable is measured with certain error. Specify the model. What are its consequences on the parameters?