For a regression of test score (T) on the endogenous variable student-teacher ratio (R), Hoxby (2000)...

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For a regression of test score (T) on the endogenous variablestudent-teacher ratio (R), Hoxby (2000) suggests using as aninstrument the deviation of potential enrollment from its long-termtrend (P), where \"potential enrollment\" means how many children ofkindergarten age there are (whether or not they attend publicschool). Which of the following arguments would NOT support P as aninstrument for R?
a. Due to high adjustment costs of buildings and teachers and thesmall/discrete number of classrooms per school, schools cannotperfectly adjust each year to maintain a target student-teacherratio
b. Parents with young children are more likely to move into goodschool districts with low student-teacher ratio
c. There are fluctuations in birth rate due to sheer randomchance
d. Changes in school district quality are slow and contribute tothe long-term enrollment trend, but not deviations from thetrend
PLEASE PROVIDE EXPLANATION IN ANSWER

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3.9 Ratings (379 Votes)

note that regression analysis tries to capture the pattern in the variation of the independent variables to account for the variation in the dependent variable Here dependent variable is T and See Answer

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