Final_study_questions_(2008)

# Final_study_questions_(2008) - Review questions for ECG 561...

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Review questions for ECG 561 final exam - Spring 2008

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5. 6 . You have a data set on 3,000 golf scores for professional golfers from tournaments in a single year. You are interested in the effect of prize money on scores and, in addition, are interested in whether or not the incentives provided by prize money change over the course of the year. To pursue these issues in the economics of golf, you have collected the following data: i y = score for observation i (for example, Tiger Wood’s score in the Master’s tournament), i x = prize money, in millions of dollars, paid to the winner of the tournament from which observation i is drawn (for example, the \$1.2 million won by the winner of i the Master’s tournament would be represented as x = 1.2 for all observations drawn from the Master’s tournament.) 1i d = 1 if observation i occurred in the first third of the year, 0 otherwise, 2i 1 if observation i occurred in the second third of the year, 0 otherwise, 3i 1 if observation i occurred in the final third of the year, 0 otherwise. Consider now the following regression model: i o 1 i 22 i 33 i ii i y = â + â x + ã d + ã ö d x + ö d x + u , i = 1, . .., 3000 .
(a) Suppose that you were concerned about heteroskedasticity in your regression relationship, but you weren’t sure of its form. Describe how you would conduct a Breusch-Pagan test for heteroskedasticity. Be specific about how you would

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Final_study_questions_(2008) - Review questions for ECG 561...

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