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Unformatted text preview: ECON 3200 Introduction to Econometrics Answers for Problem Set 5 Problem 1 (Wooldridge 8.5) 1. No. For each coefficient, the usual standard errors and the heteroskedasticity- robust ones are practically very similar. 2. The effect is - .029(4) = - .116, so the probability of smoking falls by about .116. 3. As usual, we compute the turning point in the quadratic: .020/[2(.00026)] 38.46, so about 38 and one-half years. 4. Holding other factors in the equation fixed, a person in a state with restaurant smoking restrictions has a .101 lower chance of smoking. This is similar to the effect of having four more years of education. 5. We just plug the values of the independent variables into the OLS regression line: 2 .656 .069 log(67.44) .012 log(6,500) .029(16) .020(77) .00026(77 ) .0052. smokes =- + - +- Thus, the estimated probability of smoking for this person is close to zero. (In fact, this person is not a smoker, so the equation predicts well for this particular observation.) person is not a smoker, so the equation predicts well for this particular observation....
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This note was uploaded on 10/03/2009 for the course ECON 3200 taught by Professor Neilsen during the Spring '08 term at Cornell University (Engineering School).
- Spring '08