Suppose that a computer glitch causes you to lose all the observations for which . Will ordinary least squares (OLS) still provide an unbiased estimator of if you estimate Model 1 using the remaining data? Explain.

Q1 Sample Selection8 Points
Model 1: , with
Where denotes household ‘s average annual
consumption and denotes a measure of household ‘s
permanent income (both measured in thousands of USD). Suppose
that your sample consists of a random sample of consumption and
income data from the entire population of U.S. households, which is
your population of interest.

Q1.1
2 Points
Suppose that a computer glitch causes you to lose all the observations
for which . Will ordinary least squares (OLS) still
provide an unbiased estimator of if you estimate Model 1 using the
remaining data? Explain.

What economic methods and techniques have been used to study this or a similar issue? How has the issue been addressed econometrically? Were these methods and techniques the most appropriate for this study? Why or why not?

Econometrics Analysis: The role of foreign aid in economic growth of developing economies.

A. What issue are you addressing? Why is your research question relevant?

B. Identify the target audience(s) for your paper. Is each audience technical or nontechnical? For example, are they general readers, managers, or political decision makers? Why would your research be relevant for this audience? II. Literature Review

A. What economic methods and techniques have been used to study this or a similar issue? How has the issue been addressed econometrically? Were these methods and techniques the most appropriate for this study? Why or why not?

B. What are the hypotheses you plan to test? How do they translate into empirical models? III. Data

A. What data will you use in your empirical work? What is the source of your data? Why is this particular data set appropriate for the study?

B. What type of data (summary statistics, scatter plots, etc.) was utilized in your study? What relationships can be gleaned by simple data screening? What are the implications of these relationships?

C. What limitations could your data impose on the choice of empirical method? What are the effects of these limitations? IV. Empirical Approach

A. What empirical method(s) do you propose and why? Explain why it is appropriate to use the method(s).

B. What are the limitations of your proposed empirical method? What possible alternative methods can be used? Be sure to address causes for these limitations, such as problems with the data or with interactions between variables.

C. What is your model specification? What functional form of data do you use and why? V. Results and Robustness Check

A. What are your preliminary results from initial runs in the statistical software? What is their relationship with the original hypotheses and  research questions?

B. Which violations of ordinary least squares (OLS) assumptions do you anticipate? Which diagnostic tests will you employ to check for the

presence of violations of OLS assumptions? 3 pages3 pages INCLUDE DATA AND CHART CREATED AS ASEPERATE FILE.

C. What are your secondary results from your test run through the statistical software? Interpret these test results and determine the presence or absence of problems.

D. Are your results affected by the corrections? Are they affected in a significant way? (For example, is there a change of coefficient signs, a change in statistical significance, and so on?) E.

In your conclusion, it is important to report on the results based on the statistical significance. Are your results statistically significant? Are they

Economically significant? Are some variables more significant than others? How does this relate to the original hypotheses and research questions? Discuss. VI. Conclusion

A. What are the actionable insights or recommendations based on your results?

B. What are the overall results of your study? Address any limitations, caveats, and possibilities for further actions. Be sure to keep nontechnical audiences in min