Question

In a study relating consumption expenditure to individual health outcomes, a survey is conducted asking individuals to report their health status on a scale from 1–100, the worst being 1 and the best being 100. The individuals are also given a diary in which they are asked to note down their purchases and consumption for a week. The data you have from the survey is each individual's: • full set of weekly expenditures in dollars recorded into 4 broad mutually exclusive but exhaustive sub-categories: o housing expenses (housing) o food and drink (fddrink) o recreation (recr), and o other (other) • total weekly expenditure in dollars (totexp) • the measure of health (health). Your model of interest is: health = beta_0 + beta_1 housing + beta_2 fddrink + beta_3 recr + beta_4 other + beta_5 totexp + u Briefly explain why this model violates MLR.3.

          In a study relating consumption expenditure to individual health outcomes, a survey is conducted asking individuals to report their health status on a scale from 1–100, the worst being 1 and the best being 100. The individuals are also given a diary in which they are asked to note down their purchases and consumption for a week. The data you have from the survey is each individual's:

• full set of weekly expenditures in dollars recorded into 4 broad mutually exclusive but exhaustive sub-categories:
  o housing expenses (housing)
  o food and drink (fddrink)
  o recreation (recr), and
  o other (other)
• total weekly expenditure in dollars (totexp)
• the measure of health (health).

Your model of interest is:

health = beta_0 + beta_1 housing + beta_2 fddrink + beta_3 recr + beta_4 other + beta_5 totexp + u

Briefly explain why this model violates MLR.3.

In a study relating consumption expenditure to individual health outcomes, a survey is conducted asking individuals to report their health status on a scale from 1–100, the worst being 1 and the best being 100. The individuals are also given a diary in which they are asked to note down their purchases and consumption for a week. The data you have from the survey is each individual's:

• full set of weekly expenditures in dollars recorded into 4 broad mutually exclusive but exhaustive sub-categories:
o housing expenses (housing)
o food and drink (fddrink)
o recreation (recr), and
o other (other)
• total weekly expenditure in dollars (totexp)
• the measure of health (health).

Your model of interest is:

health = beta0 + beta1 housing + beta2 fddrink + beta3 recr + beta4 other + beta5 totexp + u

Briefly explain why this model violates MLR.3.

Added by Katherine B.

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