Question

You want to estimate E[x] and you have two datasets. In the first data set, there are 10 observations. In the second data set there are 100 observations, but these observations involve measurement errors. That is, X tilda = X + e, where e is a classical measurement error. You can only use one dataset, and you want to have a precise estimate in the sense of having a low variance.

A) You should always use the first data set because it has no measurement error

B) You should always use the second data set because it has more observation

C) If V[e] < V[X], you should use the second dataset

D) If V[e] >= V[X], you should use the first dataset

Answer 1

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