Errors-in-variables bias
A)is present when the probability limit of the OLS estimator is given by .
B)arises when an independent variable is measured imprecisely.
C)arises when the dependent variable is measured imprecisely.
D)always occurs in economics since economic data is never precisely measured.

Question

Errors-in-variables bias
A)is present when the probability limit of the OLS estimator is given by . 
B)arises when an independent variable is measured imprecisely. 
C)arises when the dependent variable is measured imprecisely. 
D)always occurs in economics since economic data is never precisely measured.

Quizplus · Accepted Answer

Errors-in-variables bias arises when an independent variable is measured imprecisely.

Errors-In-Variables Bias