STUDENT SOLUTIONSMANUAL
Jeffrey M. Wooldridge
Introductory Econometrics: A Modern Approach, 4e
CONTENTS
Preface iv
Chapter 1 Introduction1
Chapter 2 The Simple Regression Model 3
Chapter 3 Multiple Regression Analysis: Estimation 9
Chapter 4 Multiple Regression Analysis: Inference 17
Chapter 5 Multiple Regression Analysis: OLS Asymptotics 24
Chapter 6 Multiple Regression Analysis: Further Issues 27
Chapter 7 Multiple Regression Analysis With Qualitative 34
Information: Binary (or Dummy) Variables
Chapter 8 Heteroskedasticity 42
Chapter 9 More on Specification and Data Problems 47
Chapter 10 Basic Regression Analysis With Time Series Data 52
Chapter 11 Further Issues in Using OLS With Time Series Data 58
Chapter 12 Serial Correlation and Heteroskedasticity in 65
Time Series Regressions
Chapter 13 Pooling Cross Sections Across Time. Simple 71
Panel Data Methods
Chapter 14 Advanced Panel Data Methods 78
Chapter 15 Instrumental Variables Estimation and Two Stage 85
Least Squares
Chapter 16 Simultaneous Equations Models 92
Chapter 17 Limited Dependent Variable Models and Sample 99
Selection Corrections
Chapter 18 Advanced Time Series Topics 110
Appendix A Basic Mathematical Tools 117
Appendix B Fundamentals of Probability 119
Appendix C Fundamentals of Mathematical Statistics 120
Appendix D Summary of Matrix Algebra 122
Appendix E The Linear Regression Model in Matrix Form 123
PREFACE
This manual contains solutions to the odd-numbered problems and computer exercises in Introductory Econometrics: A Modern Approach, 4e. Hopefully, you will find that the solutions are detailed enough to act as a study supplement to the text. Rather than just presenting the final answer, I usually provide detailed steps, emphasizing where the chapter material is used in solving the problems.
Some of the answers given here are subjective, and you or your instructor may have perfectly acceptable alternative answers or opinions.
I obtained the solutions to the computer exercises using Stata, starting with version 4.0 and ending with version 9.0. Nevertheless, almost all of the estimation methods covered in the text have been standardized, and different econometrics or statistical packages should give the same answers to the reported degree of accuracy. There can be differences when applying more advanced techniques, as conventions sometimes differ on how to choose or estimate auxiliary parameters. (Examples include heteroskedasticity-robust standard errors, estimates of a random effects model, and corrections for sample selection bias.) Any differences in estimates or test statistics should be practically unimportant, provided you are using a reasonably large sample size.
While I have endeavored to make the solutions free of mistakes, some errors may have crept in. I would appreciate hearing from students who find mistakes. I will keep a list of any notable errors on the Web site for the book, academic.cengage.com/economics/wooldridge. I would also like to hear from students who have suggestions for improving either the solutions or the problems themselves. I can be reached via e-mail at wooldri1@.msu.edu.
I hope that you find this solutions manual helpful when used in conjunction with the text. I look forward to hearing from you.
Jeffrey M. Wooldridge
Department of Economics
MichiganStateUniversity
110 Marshall-Adams Hall
East Lansing, MI 48824-1038
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