Measurement error in an independent variable occurs when
A)the dependent variable is uncorrelated with the error term.
B)the true value of the independent variable is observed.
C)the true value of the left hand side variable is not known.
D)the variable $x _ { 1 i }$ is measured with error such that
$x _ { 1 i } = x _ { 1 i } ^ { * } + u _ { 1 i } \text { and } x _ { 1 i } ^ { * }$ is the true value of the variable.

Question

Measurement error in an independent variable occurs when
A)the dependent variable is uncorrelated with the error term.
B)the true value of the independent variable is observed.
C)the true value of the left hand side variable is not known.
D)the variable $x _ { 1 i }$ is measured with error such that
 $x _ { 1 i } = x _ { 1 i } ^ { * } + u _ { 1 i } \text { and } x _ { 1 i } ^ { * }$ is the true value of the variable.

Quizplus · Accepted Answer

Measurement error in an independent variable occurs when the variable $x _ { 1 i }$ is measured with error such that $x _ { 1 i } = x _ { 1 i } ^ { * } + u _ { 1 i } \text { and } x _ { 1 i } ^ { * }$ is the true value of the variable. Option A is incorrect because the dependent variable can still be correlated with the error term even if the independent variable has measurement error. Option B is incorrect because the true value of the independent variable is not observed due to measurement error. Option C is incorrect because the left-hand side variable is usually the dependent variable, not the independent variable.

Measurement Error in an Independent Variable Occurs When A)the Dependent x1ix _ { 1 i }x1i​

Measurement Error in an Independent Variable Occurs When
A)the Dependent $x _ { 1 i }$