You Have Obtained Data on Test Scores and Student-Teacher Ratios

question 23

Essay

You have obtained data on test scores and student-teacher ratios in region A and region B of your state.Region B,on average,has lower student-teacher ratios than region A.You decide to run the following regression.
Yi = β0+ β1X1i + β2X2i + β3X3i+ui
where X1 is the class size in region A,X2 is the difference between the class size between region A and B,and X3 is the class size in region B.Your regression package shows a message indicating that it cannot estimate the above equation.What is the problem here and how can it be fixed? Explain the problem in terms of the rank of the X matrix.

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Definitions:

Unilateral Mistake

A mistake that occurs when one party to a contract is mistaken as to a material fact.

Relief

Aid or assistance offered to alleviate hardship or distress in various contexts, such as financial relief or emergency relief efforts.

Unilateral Mistake

A misunderstanding or error made by one party in a contract, which does not necessarily void the contract unless it significantly affects the terms.

Material Fact

A fact that, if known, could influence a decision maker's actions or decisions, especially in legal contexts.