Solutions_to_ProblemSet_4

# Solutions_to_ProblemSet_4 - Problem Set 4 Solutions 1...

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Unformatted text preview: Problem Set # 4 Solutions 1. Problem 4.8, p. 161. (i) ) ˆ , ˆ cov( 3 ) ˆ var( 9 ) ˆ var( ) ˆ 3 ˆ var( 2 1 2 1 2 1 . Therefore, ) ˆ , ˆ cov( 3 ) ˆ var( 9 ) ˆ var( ) ˆ 3 ˆ ( 2 1 2 1 2 1 se . (ii) ) ˆ , ˆ cov( 3 ) ˆ var( 9 ) ˆ var( 1 ˆ 3 ˆ 2 1 2 1 2 1 T . (iii) . ) 3 ( 3 3 3 2 1 2 1 1 2 1 1 u x x x x y 2. (i) The restriction that the effect of another year of general workforce experience has the same effect on log(wage) is another year of tenure with the current employer is . ) (exp exp ) log( 2 1 3 2 u tenure er er educ wage The null hypothesis that . 3 2 (ii) The resulting regression equation is ) exp ( 01337 . exp 00195 . 07486 . 49670 . 5 ) ˆ log( er educ er educ ge a w (0.11053) (0....
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Solutions_to_ProblemSet_4 - Problem Set 4 Solutions 1...

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