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Hwk 2 - Fall 2010

# Hwk 2 - Fall 2010 - Econ 230 Homework 2 1 Let kids denote...

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Econ 230 - Homework 2 1. Let kids denote the number of children ever born to a woman, and let educ denote years of educations for the woman. A simple model relating fertility to years of education is: kids = β 0 + β 1 educ + u, where u is the unobserved error. (i) What kind of factors are contained in u ? Are these likely to be correlated with level edu- cation? (ii) Will a simple regression analysis uncover the ceteris paribus eﬀect of education of fertility? Explain. 2. The data set BWGHT.RAW contains data on births of women in the United States. Two variables of interest are the dependent variable, infant birth weight in ounces ( bwght ), and an explanatory variable, average number of cigarettes the mother smoked per day during pregnancy ( cigs ). The following simple regression was estimated using data on n = 1388 births: ˆ bwght = 119 . 77 - 0 . 514 cigs (i) What is the predicted birth weight when cigs = 0? What about when cigs = 20 (one pack per day)? Comment on the diﬀerence. (ii) Does this simple regression necessarily capture a causal relationship between the child’s birth

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Hwk 2 - Fall 2010 - Econ 230 Homework 2 1 Let kids denote...

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