Beyond the conditions required for consistent estimation of a model for causality, in order to conduct inference what additional assumption is required?
A) The errors are distributed normally.
B) The errors are distributed as the student T distribution.
C) The size of the sample is sufficiently large , where K is the number of coefficients).
D) None of the answers is correct.

Question

Quizplus · Accepted Answer

For conducting inference in statistical models, a sufficiently large sample size is crucial. This ensures that the estimators' distribution approaches normality due to the Central Limit Theorem, allowing for valid hypothesis testing and confidence interval construction. The specific distribution of errors (normal or T) is less critical than having a large enough sample size to approximate normality in the estimators' distribution.

Beyond the Conditions Required for Consistent Estimation of a Model