hw3-spring04-ans - 1 Answers to Homework 3 1. Create...

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Unformatted text preview: 1 Answers to Homework 3 1. Create variables . use home_heating.dta . . tab mode, gen(mode) mode | Freq. Percent Cum.-----------------+----------------------------------- gas central | 900 20.00 20.00 gas room | 900 20.00 40.00 electric central | 900 20.00 60.00 electric room | 900 20.00 80.00 heat pump | 900 20.00 100.00-----------------+----------------------------------- Total | 4,500 100.00 . . *** use income/1000 for better scaling *** . gen income2=mode2*income/1000 . gen income3=mode3*income/1000 . gen income4=mode4*income/1000 . gen income5=mode5*income/1000 . . gen agehed2=mode2*agehed . gen agehed3=mode3*agehed . gen agehed4=mode4*agehed . gen agehed5=mode5*agehed . . gen rooms2=mode2*rooms . gen rooms3=mode3*rooms . gen rooms4=mode4*rooms . gen rooms5=mode5*rooms . . *** valley is omitted region category *** . gen ncost12=mode2*ncost1 . gen ncost13=mode3*ncost1 . gen ncost14=mode4*ncost1 . gen ncost15=mode5*ncost1 . . gen scost12=mode2*scost1 . gen scost13=mode3*scost1 . gen scost14=mode4*scost1 . gen scost15=mode5*scost1 . . gen mountn2=mode2*mountn . gen mountn3=mode3*mountn . gen mountn4=mode4*mountn . gen mountn5=mode5*mountn 2 a. . clogit choice installcost operatecost, group(id) Iteration 0: log likelihood = -1375.5926 Iteration 1: log likelihood = -1099.2729 Iteration 2: log likelihood = -1095.2486 Iteration 3: log likelihood = -1095.2371 Conditional (fixed-effects) logistic regression Number of obs = 4500 LR chi2(2) = 706.51 Prob > chi2 = 0.0000 Log likelihood = -1095.2371 Pseudo R2 = 0.2439------------------------------------------------------------------------------ choice | Coef. Std. Err. z P>|z| [95% Conf. Interval]-------------+---------------------------------------------------------------- installcost | -.0062319 .0003528 -17.67 0.000 -.0069233 -.0055405 operatecost | -.0045801 .0003222 -14.22 0.000 -.0052115 -.0039487------------------------------------------------------------------------------ The greater the installation cost of a particular heating technology, the less likely a homeowner is to choose that technology. The greater the operating cost of a particular heating technology, the less likely a homeowner is to choose that technology. b. A homeowner is willing to pay $0.73 extra in installation costs for a $1 reduction in operating costs. Note, this makes little sense, probably because the model is poorly specified. c. . clogit choice installcost operatecost mode2-mode5, group(id) Iteration 0: log likelihood = -1253.3016 Iteration 1: log likelihood = -1016.7391 Iteration 2: log likelihood = -1008.3214 Iteration 3: log likelihood = -1008.2287 Iteration 4: log likelihood = -1008.2287 Conditional (fixed-effects) logistic regression Number of obs = 4500 LR chi2(6) = 880.53 Prob > chi2 = 0.0000 Log likelihood = -1008.2287 Pseudo R2 = 0.3039------------------------------------------------------------------------------ choice | Coef. Std. Err. z P>|z| [95% Conf. Interval]-------------+----------------------------------------------------------------...
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This note was uploaded on 11/12/2009 for the course ECONOMICS 721 taught by Professor Partha during the Spring '09 term at CUNY Hunter.

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hw3-spring04-ans - 1 Answers to Homework 3 1. Create...

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