Problem Set 3
Economics 103
Introduction to Econometrics
Due Tuesday, May 12th, 2009
True/False/Explain
1.
In the regression model: Y=
β
₀
+
β
₁female
+
β
₂education
+
ε
,
β
₁
represents the
intercept for females.
2.
In the model Y =
β
0
+
β
₁
log(X) +
ε
, the effect of X on Y does not depend on
the level of x.
3.
In the model Y =
β
0
+
β
₁
X +
β
X
2
+
ε
the effect of X on Y does not depend on the
level of X.
4.
An insignificant coefficient (not statistically different from zero) means you
should not include that variable in the model.
5.
In the regression model: Y=
β
₀
+
β
₁female
+
β
₂education
+
β
3
education*female+
ε
,
β
3
represents the return to education for females.
6.
If you estimate the regression model: Y=
β
₀
+
β
₁female
+
β
₂education
+
β
3
education*female+
ε
, where Y is earnings, the constant term will represent
the average earnings for men and Beta1 will represent the average earnings for
women.
7.
In the multiple regression model, the Adjusted
R
2
cannot be negative.
8.
In the multiple regression model, the Adjusted
R
2
is the same as the RSquared
when the explanatory variables are all statistically significant.
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 Spring '09
 WEISBART
 Statistics, Econometrics, Regression Analysis, regression model, dummy variables

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