You Want to Study the Relationship Between Weight and Height

question 34

Essay

You want to study the relationship between weight and height of young children (4^th grade to 7^th grade). You collect data for more than 400 students and track the progress of these students over the following four years, where you end up with a balanced panel of 400 students (you discard the observations for the students who moved away). Discuss some of the entity fixed effects which you potentially capture by allowing for a binary variable for each of the students. Do you expect significant time fixed effects if you allowed for them?

---

Definitions:

Capital Statement

A financial statement that outlines the changes in owners' equity over a specific period.

Drawings

Withdrawals made by an owner from the business for personal use, reducing the capital account of the owner.

Capital Investment

Funds invested in a business by the owners or shareholders to purchase assets or to provide working capital with the aim of generating long-term revenue and profits.

Net Loss

The result when a company's total expenses exceed its total revenues during a specific period, indicating a negative financial performance.