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  3. 2 f 2 pts suppose that the true values of...

Question: 2 f 2 pts suppose that the true values of...

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2 f) (2 pts.) Suppose that the true values of the popuiation parameters are & the data point (X2, D2), calculate the deterministic component EYDz) predicted value Y2 and the residual u ation parameters are β1-3 and β,-2. For 2 the error term u2, the 8) (3 pts.) In a single graph Draw the sample regression function, the population regression function and all data points, ie. (DIM), (Dz.½) and (D3,⅓). -For the data point (D2, ½), illustrate the decomposition of Y2 into its deterministic component E( For the data p its residual u2 1D2) and its error term u2; int (DzM), illustrate the decomposition of ½ into its predicted value and h) (2 pts.) Compute TSs i) (2 pts.) Compute ESS.(1 pt.) Compute the coefficient of determination R Ctrt k) (2 pts.) In a single graph Draw the sample regression function and the data point (Dp,Y2) For the data point (D2, Y2), illustrate th and its unexplained component. e decomposition of Y2 into its explained component (2 pts.) Suppose that the sample var(B2) 6. Test the hypothesis that D, has a positive impact on Y. In your answer, you must specify the appropriate hypotheses and statistical test, demonstrate your calculations and provide a conclusion I) m) (2 pts.) Interpret your result in l) without using any mathematical notationQuestion 1 (27 pts.) A health economist uses data on enrollment in a health insurance plan Di and doctor visits Y to estimate the population regression function (PRF) Y Br + P2Di+ u by using the following sample: 0 3 5 The benchmark group is not enrolled in a health insurance plan. ) that minimizes the sum of squared residuals, where (2 pts.) write down the function S( Al is the sample estimator of A and B2 is the sample estimator of β2- a) (2 pts.) Briefly describe the nature of the optimization problem by specifying the dependent, explanatory and exogenous variables from a statistical standpoint. b)

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