ProblemSet5 - ECON 3200 Introduction to Econometrics...

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ECON 3200 Introduction to Econometrics Problem set 5 (due date: April 2, 2009) Problem 1 (Wooldridge 8.5) The variable smokes is a binary variable equal to one if a person smokes, and zero otherwise. Using the data in smoke.xls we estimate a linear probability model for smokes : d smokes = 0 : 656 (0 : 855) [0 : 856] & 0 : 069 (0 : 204) [0 : 207] log( cigpric ) + 0 : 012 (0 : 026) [0 : 026] log( income ) & 0 : 029 (0 : 006) [0 : 006] educ +0 : 020 (0 : 006) [0 : 005] age & 0 : 00026 (0 : 00006) [0 : 00006] age 2 & 0 : 101 (0 : 039) [0 : 038] restaurn & 0 : 026 (0 : 052) [0 : 050] white; n = 807 ; R 2 = 0 : 062 The variable white equals one if the respondent is white and zero otherwise; cigpric = the per pack price of cigarettes (in cents), income = annual income, educ = years of schooling, age = age measured in years, restaurn = 1 if the person resides in a state with restaurant smoking restrictions. Both the usual and heteroskedasticity-robust standard errors are reported (the latter are in square brackets). 1. Are there any important di/erences between the two sets of standard
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ProblemSet5 - ECON 3200 Introduction to Econometrics...

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