Question

Explain in your own words the following methods. The use of mathematical (formal) derivations will be rewarded with extra points.
1. Two Stage Least Squares.
2. Estimation with control variables.
3. Panel estimation with fixed effects.

Answer 1

Answer:

1. Two Stage Least Squares

Two stage least squares is a statistical technique of regression analysis. It is used to analyze structural equations. It is used to compute estimated values of the problematic predictors and then linear regression model of dependent variables is computed. This technique is also used in quasi experiments.

2. Estimation with control variables

A control variable is constant element which is kept unchanged throughout the process of experiment in order to get the estimation.

3. Panel estimation with fixed effects

In Panel estimation fixed effects are referred to the estimator of the coefficient in regression model. Panel estimation method with fixed effects helps estimation of equations.

Explanation:

1. Two Stage Least Squares

Two stage least squares is a statistical technique of regression analysis. It is used to analyze structural equations. It is used to compute estimated values of the problematic predictors and then linear regression model of dependent variables is computed. This technique is also used in quasi experiments.

2. Estimation with control variables

A control variable is constant element which is kept unchanged throughout the process of experiment in order to get the estimation.

3. Panel estimation with fixed effects

In Panel estimation fixed effects are referred to the estimator of the coefficient in regression model. Panel estimation method with fixed effects helps estimation of equations.