suppose you have two years' worth of panel data on wages and work experience of adults; however, the data set has no further information on the characteristics of the individuals in the data set. specifically, you have cross-sectional wage and work experience data on individuals in 2006, and cross-sectional data on those same individuals in 2012. you plan to use the following fixed effects model to analyze the effects of work experience on wages:
log ( wage it ) = Bo + 80 yr10, + B1 experir + ai + Uit where wage ir = yearly wage of individual i at time t, in dollars yrl0, =1 in the year 2010 (t = 2), and =0 otherwise (t = 1) exper = years of work experience of individual i, at time t a; = unobserved (time-invariant) effect Uit = idiosyncratic error Two other factors that can influence wage, which you have not controlled for in your model, are height and industry of employment. Use the following table to indicate which term in the fixed effects model captures the effect of height, which term captures the effect of industry of employment, and which term captures the effect of work experience. Work experience di 0 Uit 0 Bi 0 Height Industry of employment 0 0 0

As given by equation work experience will be captured by Bl. Height is idiosyncratic error as it is not relevant for measuring the wages and should be captured by Uit. Industry of employment is a important factor in determining wage and should be a unobserved factor and captured by al.

In econometrics, "idiosyncratic error" is used to explain blunders—this is, unobserved elements that impact the established variable—from panel information that each modifications through the years and throughout devices.

Idiosyncratic approach specific to an individual. Albert Einstein famously had plenty of idiosyncratic conduct. for example, he hardly ever wore socks, and he talked to his cat.

In case you describe someone's actions or traits as idiosyncratic, you suggest that they may be instead uncommon.

Learn more about idiosyncratic error here : https://brainly.com/question/23946829

#SPJ4