SOL_API-202A+Assignment+3+S09

# SOL_API-202A+Assignment+3+S09 - API-202A Empirical Methods...

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2 Interpretation of the coefficients in the paper. As I mentioned in class today, this paper runs a type of regression that is slightly different than the one we have seen so far. The material we have studied in class applies to this type of regression as well, except that the interpretation of the coefficients is slightly different. I am writing down for you the explanation I gave about it in class using a simple example. Note also that many of the questions do not depend specifically on this issue. Y : wages X 1 : years of schooling (YOS) The standard case: Y = 0 ˆ 1 ˆ X 1 + ˆ The case in the paper: Log(Y) = 0 ˆ 1 ˆ X 1 + ˆ Interpretation of 1 ˆ (in words) An additional YOS is associated with an average increase on wages of 1 ˆ dollars in the sample An additional YOS is associated with an average
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SOL_API-202A+Assignment+3+S09 - API-202A Empirical Methods...

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