Christopher Dougherty

EC220 - Introduction to econometrics (review chapter)Slideshow: exercise r.19

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Dougherty, C. (2012) EC220 - Introduction to econometrics (review chapter). [Teaching Resource]

© 2012 The Author

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Available in LSE Learning Resources Online: May 2012

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EXERCISE R.19

R.19 In general, the variance of the distribution of an estimator decreases when the sample size is increased. Is it correct to describe the estimator as becoming more efficient?

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EXERCISE R.19

R.19 In general, the variance of the distribution of an estimator decreases when the sample size is increased. Is it correct to describe the estimator as becoming more efficient?

No. We use the term ‘efficiency’ when comparing two or more estimators of the same parameter, using a fixed data set.

We should not use it in the way suggested. Instead, we should simply say that the variance of the distribution of the estimator is decreasing.

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Copyright Christopher Dougherty 1999–2006. This slideshow may be freely copied for personal use.

26.08.06