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Hwk 3 - Fall 2010

# Hwk 3 - Fall 2010 - Economics 230 Fall 2010 Homework 3...

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Economics 230 Homework - 3 Z.Mukherjee Fall 2010 1. The following equation was estimated by OLS, sat hsperc pa co 00148 . 0 0135 . 0 392 . 1 lg + = , 137 , 4 = n and 273 . 0 2 = R , where colgpa (college GPA) is measured on a four-point scale, hsperc is the percentile in the high school graduating class (defined so that, for example, hsperc = 5 means the top 5% of the class), and sat is the combined math and verbal scores on the student achievement test. (i) Why does it make sense for the coefficient on hsperc to be negative? (ii) What is the predicted college GPA when hsperc = 20 and sat = 1050? (iii) Suppose that two high school graduates, A and B, graduated in the same percentile from high school, but Student’s A’s SAT score was 140 points higher. What is the predicted difference in college GPA for these two students? Is that difference large? (iv) What does the R-square value tell us? 2. The following equation was estimated by OLS, feduc meduc sibs educ 210 . 0 131 . 0 094 . 0 36 . 10 + + = , 722 = n and 214 . 0 2 = R where educ is years of schooling, sibs are number of siblings, meduc

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