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You would like to estimate how GPA in a given term is aÂ§ected by average daily time spent on studying (in hours) in that term. You collect data from your fellow students and estimate the following regression: ^ GP A = 3:0 + 0:1hours (a) What is the interpretation of the constant? (b) In what direction is the estimated eÂ§ect biased if people report their average hours with a classical error? (c) In what direction is the constant biased in that case? (d) What is the sign of the correlation between reporting error and true hours if people who study less than average tend to overreport, and people who study more than average tend to underreport their hours? (e) Under (d), would the bias to the estimated eÂ§ect and the constant change relative to (b) and (c), and in what direction?
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