//  File MIT-Lab-22-03-04-04.txt. Edition 1/22/2013.

// Lists: Demand Constant, Price Coef, X Coef, X Var, and Error Var
	20  30  10  30
	-4.0 -1.0 3.0 -4.0
	1.0 2.0 1.0 1.0
	30 40 10 30
	10 20 10 20
	
// Lists: Supply Constant, Price Coef, X Coef, X Var, and Error Var
	0 10  10  0
	1.0 4.0 3.0 1.0
	1.0 2.0 1.0 1.0
	30 40 10 30
	10 20 10 20
	
// List Sample Size
	20 50 5 20

// Prob Specs: Pause Dem/Sup(0 if demand) SampleSize EstProc(0:OLS, 1:RF, 2:2SLS)

` 0 0 20 1
Objective: When the reduced form (RF) estimation procedure is used
 to estimate the values of price coefficients in a simultaneous equation
 model there is both bad news and good news:
_    Bad news: The RF estimation procedure is biased.
_    Good news: The RF estimation procedure is consistent.



` 0 0 20 1
Note that the Dem radio button and the PCoef radio button are selected.
 This means that the estimates for the demand equation's price coefficient
 will be reported.
_
1. Be certain that the reduced form (RF) estimation
 procedure is selected in the Procedures drop down box. Initially the
 sample size is 20. Click Start and then after many, many repetitions
 click Stop.
______1a. What does the mean (average) of the price estimates equal?
______1b. What does the variance of the price estimates equal?


` 0 0 30 1
2. The sample size has been increased from 20 to 30. Click Start and then
 after many, many repetitions click Stop.
______2a. What does the mean (average) of the price estimates equal?
______2b. What does the variance of the price estimates equal?
_
3. Increase the sample size from 30 to 40. Click Start and then
 after many, many repetitions click Stop.
______3a. What does the mean (average) of the price estimates equal?
______3b. What does the variance of the price estimates equal?

`
4. Do results suggest that the reduced form (RF) estimation procedure
 for the price coefficient
______4a. unbiased?
______4b. consistent?
Explain.




` 0 -1 20 1
Now, let us turn our attention to supply. The the Sup radio button
 is now selected. The estimates for the supply equation's price
 coefficient will be reported.
_
5. Be certain that the reduced form (RF) estimation
 procedure is selected in the Procedures drop down box. Initially the
 sample size is 20. Click Start and then after many, many repetitions
 click Stop.
______1a. What does the mean (average) of the price estimates equal?
______1b. What does the variance of the price estimates equal?


` 0 -1 30 1
6. The sample size has been increased from 20 to 30. Click Start and then
 after many, many repetitions click Stop.
______2a. What does the mean (average) of the price estimates equal?
______2b. What does the variance of the price estimates equal?
_
7. Increase the sample size from 30 to 40. Click Start and then
 after many, many repetitions click Stop.
______3a. What does the mean (average) of the price estimates equal?
______3b. What does the variance of the price estimates equal?


`
8. Do results suggest that the reduced form (RF) estimation procedure
 for the price coefficient
______4a. unbiased?
______4b. consistent?
Explain.