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17 Cards in this Set
- Front
- Back
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Best Linear Unbiased Estimator (BLUE) |
Among all the linear unbiased estimators, the one with the smallest variance. |
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Biased Toward Zero |
A description of an estimator whose expectation in absolute value is less than the absolute value of the population parameter. |
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Ceteris Paribus |
All other relevant factors held fixed. |
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Downward Bias |
The expected value of an estimator is below the population value of the parameter. |
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Endogenous Explanatory Variable |
An explanatory variable that is correlated with the error term, either because of an omitted variable, measurement error or simultaneity. |
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Exogenous Explanatory Variable |
An explanatory variable that is uncorrelated with the error term. |
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Gauss-Markov Theorem |
A theorem that states under the five Gauss Markov assumptions, the OLS estimator is blue. |
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Inclusion of an Irrelevant Variable/Overspecifying the Model |
An explanatory variable that has a zero population parameter estimate (so no effect on y). |
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Micronumerosity |
A term to used to describe the properties of econometric estimators with small sample sizes. |
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Misspecification Analysis |
The process of determining likely biases that can arise from omitted variables, measurement error, simultaneity. |
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Multicollinearity |
Correlation between the indenpedent variables that is large. |
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Omitted Variable Bias |
Bias that arises in the OLS estimators when a relevant variable is omitted from the regression. |
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Partial Effect |
The effect of the an explanatory variable on the dependent variable, holding other factors constant. |
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Perfect Collinearity |
One independent variable is an exact linear function of one or more other independent variables. |
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Upward Bias |
The expected value of an estimator is greater than the population parameter value. |
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Variance Inflation Factor |
The term in the sampling variance affected by correlation between the explanatory variables. |
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Underspecifying the Model |
Leaving out a variable that has a nonzero partial effect on the dependent variable. |
