assignment 2 - determining the direction of causality,...

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Economics 249 Assignment 2 Due Friday, February 1 st R. Baumann Directions: Answer all questions on a separate piece of paper. Please do not turn in the questions. Be sure to use full sentences and show your work where applicable. 1. Do Newbold, et al. 3.43, pages 73 and 74, skip parts b) and c). 2. Download the file “college data.xls” from the Course Materials section of the Blackboard website. Each year, the College Guide presents data for colleges. These data are from the 2006 College Guide, and represent the top 110 schools from the liberal arts rankings in that year. a) Consider two variables: graduation rate of current students (“grad”) and percent of incoming freshmen in the top 10% of their high school graduating class (“frtop10”). After
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Unformatted text preview: determining the direction of causality, write a linear equation that relates the two variables. Next, use the Excel shortcuts “INTERCEPT” and “SLOPE” to caluclate β and 1 . b) In the model from part a), list two factors that are in the error term and explain how they influence graduation rates. c) Interpret and 1 . d) Find the predicted value and residual for Holy Cross. Why do you think the regression line under-predicts Holy Cross’s graduation rate? 3. Do Newbold, et al. problem 4.3 on page 87, and add this part: d) Show that B B A B A = ∩ ∪ ∩ ) ( ) ( Note the sample space for 4.3 is given above problem 4.1....
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This note was uploaded on 04/29/2008 for the course ECON 249 taught by Professor Baumann during the Spring '08 term at Holy Cross (MA).

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