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Unformatted text preview: k is the number of explanatory variables in the unrestricted regression), test a hypothesis that there is no systematic di f erence in the marginal e f ect of the Living Space on the Rent between studios and other apartments. Problem 2. You are given the following regression data d Expenditure = 300 (100) + 0 . 5 (0 . 4) Income 100 (50) D + 0 . 3 (0 . 3) Income D where the standard errors of the OLS estimators are given in the parentheses 1 and D is a dummy variable equal to 1 if individual is African American and 0 otherwise. a) What is the economic interpretation of all the coe cients in the above regression? b) Assuming that the OLS estimators of the coe cients on Income and on Income D are independent, provide a 95% con f dence interval for a forecast of the increase in the expenditure of an African American, whose income has just increased by 100. 2...
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This note was uploaded on 12/20/2009 for the course ECON 1300 taught by Professor Natski during the Fall '09 term at Columbia.
 Fall '09
 Natski
 Econometrics

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