One of the Earlier Textbooks in Econometrics, First Published in 1971

question 26

Essay

One of the earlier textbooks in econometrics, first published in 1971, compared "estimation of a parameter to shooting at a target with a rifle. The bull's-eye can be taken to represent the true value of the parameter, the rifle the estimator, and each shot a particular estimate." Use this analogy to discuss small and large sample properties of estimators. How do you think the author approached the n → ∞ condition? (Dependent on your view of the world, feel free to substitute guns with bow and arrow, or missile.)

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Definitions:

Per-Unit Subsidy

A government payment made for each unit of a product produced or sold, aimed at reducing the price or encouraging production.

Sales Tax

A tax imposed by government authorities on the sale of goods and services, typically calculated as a percentage of the purchase price.

Regressive Tax

A tax system where the tax rate decreases as the taxable amount increases, placing a heavier burden on lower-income individuals.

OECD

An international organisation that works to build better policies for better lives, promoting policies that will improve the economic and social well-being of people around the world.