Suppose you study how the starting salaries of college graduates depend on their

Question

Suppose you study how the starting salaries of college graduates depend on their GPA. You build the following regression model:

S = ?0 + ?1G + ?

where S is the graduate's starting annual salary (in thousands of dollars) and G is his/her cumulative GPA.

You obtain five different random samples and estimate ?1 from each of them. Your results are as follows:

Sample

1

11.7

2

13.1

3

16.2

4

12.4

5

12.8

Assume that the true ?1 is 13.1. Also suppose that all classical regression assumptions hold in your analysis. Which of the following statements about your estimates are true? (Check all that apply.)

a. To obtain an unbiased estimate of ?1, you need to take more samples.

b. All five estimates of ?1 are biased

e. The only unbiased estimate of ?1 is the one obtained from Sample 2.

Sample

1

11.7

2

13.1

3

16.2

4

12.4

5

12.8

Explanation / Answer

In the regression analysis, slope of the line is an unbiased estimator of beta1. So each of the given five estimates are the unbiased estimator.

So option d is correct.

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