ProblemSet3

# ProblemSet3 - ECON 3200 Introduction to Econometrics...

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Unformatted text preview: ECON 3200 Introduction to Econometrics Problem set 3 (due date: February 24, 2009) Problem 1 (Wooldridge 4.4) Are rent rates in&uenced by the student popu- lation in a college town? Let rent be the average monthly rent paid on rental units in a college town in the United States. Let pop denote the total city population, avginc the average city income, and pctstu the stu- dent population as a percentage of the total population. One model to test for a relationship is: log ( rent ) = & + & 1 log ( pop ) + & 2 log ( avginc ) + & 3 pctstu + u: 1. State the null hypothesis that size of the student body relative to the popu- lation has no ceteris paribus e/ect on monthly rents. State the alternative that there is an e/ect. 2. What signs do you expect for & 1 and & 2 ? 3. The equation estimated using 1990 data from rental:xls for 64 college towns is d log ( rent ) = : 043 (0 : 844) + 0 : 066 (0 : 039) log ( pop ) + 0 : 507 (0 : 081) log ( avginc ) + 0 : 0056 (0 : 0017) pctstu; n = 64 ; R 2 = 0...
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ProblemSet3 - ECON 3200 Introduction to Econometrics...

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