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Christopher Dougherty EC220 - Introduction to econometrics (review chapter) Slideshow: exercise r.19 Original citation: Dougherty, C. (2012) EC220 - Introduction to econometrics (review chapter). [Teaching Resource] © 2012 The Author This version available at: http://learningresources.lse.ac.uk/141/http://learningresources.lse.ac.uk/141/ Available in LSE Learning Resources Online: May 2012 This work is licensed under a Creative Commons Attribution-ShareAlike 3.0 License. This license allows the user to remix, tweak, and build upon the work even for commercial purposes, as long as the user credits the author and licenses their new creations under the identical terms. http://creativecommons.org/licenses/by-sa/3.0/ http://creativecommons.org/licenses/by-sa/3.0/ http://learningresources.lse.ac.uk/

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EXERCISE R.19 R.19In 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? 1

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EXERCISE R.19 R.19In 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. 2

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Copyright Christopher Dougherty 1999–2006. This slideshow may be freely copied for personal use. 26.08.06

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