To Test for Randomization When $X _ { \mathrm { i } }$

question 32

Multiple Choice

To test for randomization when $X _ { \mathrm { i } }$ is binary,

• A) you regress \(X _ { \mathrm { i } }\) on all W 's and compute the F -statistic for testing that all the coefficients on the W 's are zero. (The W 's measure characteristics of individuals, and these are not affected by the treatment.)
• B) is not possible, since binary variables can only be regressors.
• C) requires reordering the observations randomly and re-estimating the model. If the coefficients remain the same, then this is evidence of randomization.
• D) requires seeking external validity for your study.

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Definitions:

Divisional Performance

An assessment of the financial and operational effectiveness of a distinct business unit within a larger company.

Value Chain

A model that describes the full range of activities needed to create a product or service, from initial conception through the different phases of production to the delivery to consumers.

Leading Indicators

Economic factors that change before the economy starts to follow a particular pattern or trend, used to predict future movements.

Lagging Indicators

Economic indicators that usually change after the economy as a whole does, thus confirming long-term trends.