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Econometrics

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Assumption about Education Level

EMETRC-YJ4EAZ

Let's suppose you are estimating the following model, where monthly saving depends upon income:

$$savings = \beta_{0} + \beta_{1} income + u$$

If u = education, then the assumption $E(u|x) = E(u)$ can be written as:

A

$E(edu|income) = 0$

B

$E(income|edu) = E(income)$

C

$E(edu|income) = E(edu)$

D

$E(income|edu) = E(edu)$