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homework2

# homework2 - Homework 2 Economics 120B Due November 21st...

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Homework 2 Economics 120B Due November 21 st , 2008 at the beginning of the lecture All the files mentioned in this homework are available in our course Webct. Print the output (.log) file from your STATA work and staple it to your answer sheet. Some questions are theoretical and you will not need Stata to answer them. Try to use Stata as much as you can for all the other questions. Don’t forget to set up your work by: a. Setting the central directory to C:\Econ120B (C:\Econ120B is just a suggestion: you can call your central directory whatever you want). b. Opening a log file. YOU NEED TO PRINT OUT YOUR LOG FILE SO DON’T FORGET TO OPEN IT. You can do that by typing the command: log using hmw2.log, replace c. After opening each of the datasets you will need for each question, save your data as a new dataset (for example, you might call it filename _hmw2_out.dta). Now answer the following questions: 1) The dataset BWGHT.RAW contains data on births to women in the United States. Two variables of interest are the dependent variable, infant birth weight in ounces ( bwght ), and an explanatory variable, average number of cigarettes the mother smoked per day during pregnancy ( cigs ). The sample size is n = 1,388. a. Use the data on the dataset and assume a linear relationship between infant birth weight in ounces and average number of cigarettes the mother smoked per day during pregnancy. Estimate the relationship. Plot the scatterplot and the estimated regression line. b. What is the predicted birth weight when cigs = 0? What about when cigs = 20 (one pack per day)? Comment on the difference. c. Does this simple regression necessarily capture a causal relationship between the child’s birth weight and the mother’s smoking habits? Explain. d. To predict a birth weight of 125 ounces, what would the average number of cigarettes smoked by the mother during pregnancy (cigs) have to be? Comment.

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