Quiz-2-Practice-Questions-SOLUTIONS

# Quiz-2-Practice-Questions-SOLUTIONS - University of Oregon...

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University of Oregon Rosie Mueller Department of Economics Fall 2016 Quiz 2 - Practice Questions - SOLUTIONS EC 320: Econometrics The quiz will cover material since the midterm and primarily be material covered in homeworks 4, 5, and 6. The quiz will be 40 minutes long and will consist of 4-5 short answer questions. You will be allowed a simple calculator, a pencil, and a cheat sheet (i.e. a notecard or sheet of paper where you can write anything you want). 1 ) Suppose you are interested in modeling the propensity for divorced men to miss child support payments. You design a multiple regression model and estimate it using a sample of size n = 30 , arriving at the following fitted regression model (the number in parentheses below each of the parameters is the standard error for that parameter): ˆ P i = 2 . 0 + 0 . 5 M i + 0 . 25 Y i - 0 . 80 A i - 0 . 15 C i (2 . 0) (0 . 10) (20 . 0) (1 . 0) (0 . 05) where, P i is the number of monthly child support payments that the i (th) man missed in the last four years. M i is the number of months the i th man was unemployed in the last four years. Y i is the percentage of income that goes into child support payments for the i th man. A i is the age in years of the i th man. C i is the number of children the i th man has. a.) Interpret each of the estimated slope coefficients. One extra month being unemployed increases the number of missed child support payment by 0.5, holding everything else constant. A one percentage point increase in the percentage of income that goes into child support payment increases the number of monthly child support payment missed by 0.25, holding everything else constant. 1

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(This seems like a good time to refresh the difference between percent and percentage points.
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