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Delhi School of Economics Past Year Paper

The document outlines the structure and content of the M.A. Economics final exam for the Introductory Econometrics course at the Delhi School of Economics. It consists of three parts: Part A includes true/false questions and probability assessments related to disease testing; Part B focuses on regression analysis and hypothesis testing; and Part C involves testing hypotheses and understanding bias in OLS estimates. Each part requires separate answer booklets and has specific questions to be answered.

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chhavi jain
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0% found this document useful (0 votes)
428 views3 pages

Delhi School of Economics Past Year Paper

The document outlines the structure and content of the M.A. Economics final exam for the Introductory Econometrics course at the Delhi School of Economics. It consists of three parts: Part A includes true/false questions and probability assessments related to disease testing; Part B focuses on regression analysis and hypothesis testing; and Part C involves testing hypotheses and understanding bias in OLS estimates. Each part requires separate answer booklets and has specific questions to be answered.

Uploaded by

chhavi jain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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EC003: Introductory Econometrics

Department of Economics
Delhi School of Economics
M.A. Economics (Final Exam, Semester I, 2022-23)
Time:3 hours Total Marks: 70

The exam has three parts, A, B and C. Answer each part in a separate booklet
and clearly label which part you are answering on the cover page of thebooklet.
Starteach question on afresh page.

PART -A

Answer all questions from part A.

1. State whether each of the following statement is TRUE or FALSE: (4 marks)


a. All events are not subset of sample space.
b. Allsubsets of the sample space are events.
C. Allevents are subset of the sample space but all subset are not events.
d. Allevents are subset of the sample space and all subset are alsoevents.
2. What is the difference between Algebra and Signma Algebra? Providea suitable
example for each. (5 marks)
3. Test for aDisease. Suppose that the test for a rare disease is 90 percent reliable
in the following sense: If a person has the disease, there is a probability of 0.9
that the test willgive a positive response; whereas, if a person does not have
the disease, there is a probability of only 0.1 that the test will give a positive
response. Data indicate that your chances of having the disease are only 1in
10,000. If you learn that you had a positive response to the test, answer the
following:
a. What is the probability that you have the disease? (2 marks)
b. Is it applicable in the case of Covid 19? Explain. (4 marks )
Part B

Q1. State with reason whether the following statements are true, false, or uncertain. Be precise.
(6x2=12)
a) The t test of significance in two variable regression requires that the sampling distributions of
estimators Band B, follow the normal distribution.
b) Thep value and the size of atest statistic mean the same thing.
things.
c) The conditional and unconditional means of a random variable are the same
variance of Y, var (Y =
d) The conditional variancc, var (Yi| Xi) = o, and the unconditional
a, will be the same if X had no influence on Y.
c) The higher the value of o', the larger is the variance of B.
normally distributed, the OLS
) Even though the disturbance term in the CLRM is not
estimators are still unbiased.

has estimates û= 2, B= 0.4, g2= 4, r, = 0.6


Q2 (i). The lincar Regression function Y= a + BX, (4)
hypothesis that ß =0.
considering n = 100. Test the
between time spent on sleeping and, working and other
Q2 (i1) The equation to study the trade-off
factors affecting sleep is given as:
age
sleep =3638.25-0.148 totwrk-11.13 educ + 2.20
(112.28) (0.017) (5.88) (1.45)
n=706, R=0.113
and age are
Where sleep and totwrk (total work) are measured in minutes per week and educ
measured in years. Based on this equation answer the following:
1level against a two-sided alternative? (3)
(i) Is cither educ or age individually significant at the 5%
(ii) Dropping educ and age from theequation gives
sleep = 3586.38-0.151 totwrk
(38.91) (0.017)
n=706, R'=0.103
equation at the 5% level? Justify your answer. (3)
Arc educ and age jointly significant in the original
affect the estimatcd trade-off between sleeping
(iii)Docs including educ and age in the model greatly (2)
and working?
of employees (N) for a random sample
Q3. In aregrcssion of avcrage wages (W, S)on the number (7)
of 30 firmns, the following regression results were obtained:
W =7.5 + 0.009N. ...(1)
t =n.a (16.10) R'=0.90

WÊN = 0.008 + 7.8()......


t-(14.43) (76.58) R'=0.99
a) How do you interpret the two regressions?
Can you relate the slopes and intercepts of the twO models?
c) Can youcompare the R´ valucs of the two models? Why or Why not?

|.46
3
Part C
|Kindly attempt Part Con a separate Answer Script

Total 24 marks
Attempt allquestions
1. Suppose that a single observation Xis drawn from uniforn distribution on the
interval (0, 6], and that the following hypotheses are to be tested:
Ho: 0>3
H:0<3
Considera test procedure such that the null is rejected when Xs2
a. Determine the power function of the test.
b. Determine the size of the test.
(5+4)
2. Suppose that the daly wages of aworker in the unorganized sector (wages) depends
on two factors, number of years of schooling of the worker (school) and worker's
ability (ability):
wages = Bo + Bi school + B2 ability + u
Assume that this equation satisfies the Gauss-Markov assumptions. If there are
strong reasons to believe that 'school' and 'ability' are positively correlated; and

that 'ability' has a very strong impact on 'wages', what is the likely bias in OLS
estimate of ßi obtained from the simple regression of 'wages' on 'school'?
(5)
3. Consider the model:

where u,=Piu-1t&, lel <1


and [, is awhite noise error term. Explain the steps to obtain estimates of p, using

the Cochrane Orcutt iterative procedure.


(10)

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