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Unformatted text preview: 1 Econ 513, Fall 2005 Problem Set 4 Use the data in the ascii file LOTTERY.DAT. There are four variables in this data set: HOMEVAL (value of home for homeowners, in thousands of dollars), EARN (yearly earnings, in thousands of dollars), PRIZE (lottery prize, in thousands of dollars per year), EDUC (in years). We will look at the relation between the value of the home and the lottery prize, control- ling for earnings and education. 1. What is the sample size. How many observations are censored (having zero housing values)? Calculate the mean, standard deviation, minimum and maximum for all four variables. 2. Use a linear regression model to estimate the relation between the value of the house, earnings, education and the lottery prize. 3. What is the average value of housing in the sample? What would be the effect on average housing values of giving everybody in the sample an additional $20,000 per year in lottery prizes?...
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- Fall '07