Question

Example 3: Theory of medical physiology “Taller people tend to be heavier” Let the words “taller” and “heavier” be represented by the variable “height” and “weight”, respectively. Suppose, we come up with an econometrics model to study a dataset of these variables for the demographic segment of a university faculty members.

Question # 4: What is the dependent variable? What is the independent variable?

Question # 5: Write a model similar to equation 3(GRADE = β1 + β2SKIP + Ɛ is equation 3)

Question # 6: How could such model be useful?

Answer 1

4.

Here, taller people tend to be heavier means greater the height, more is the weight of that person.

The Independent variable is height here whereas weight is the dependent variable as weight depends on the height of that person.

5.

WEIGHT = β1 + β2*HEIGHT + Ɛ

Where weight is the dependent variable

and height is the independent variable.

6.

This model can be useful where we have a person's height and we need to predict the weight of that person. There will be outliers in this data also as it can happen that a tall person is skinny and have less weight whereas a short person can be heavy.