Hw2 - Gregory Smith Econometrics Problem Set 2 C1.1(i We...

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Unformatted text preview: Gregory Smith 9/16/2009 Econometrics Problem Set 2 C1.1 (i) We expect that an increase in education would have a positive correlation on wage. (ii) . reg wage educ Source | SS df MS Number of obs = 526-------------+------------------------------ F( 1, 524) = 103.36 Model | 1179.73204 1 1179.73204 Prob > F = 0.0000 Residual | 5980.68225 524 11.4135158 R-squared = 0.1648-------------+------------------------------ Adj R-squared = 0.1632 Total | 7160.41429 525 13.6388844 Root MSE = 3.3784------------------------------------------------------------------------------ wage | Coef. Std. Err. t P> | t | [95% Conf. Interval]-------------+---------------------------------------------------------------- educ | .5413593 .053248 10.17 0.000 .4367534 .6459651 _cons | -.9048516 .6849678 -1.32 0.187 -2.250472 .4407687 For every increase (year) of education, I expect to increase my wage, on average, by .5413593. So Yes. 5 10 15 20 25 5 10 15 20 years of education average hourly earnings Fitted values . l . (iii) (iv). display invFtail(1,524,.05) Critical F Value = 3.8592662 F( 1, 524) = 103.36 = sample F R-squared = 0.1648 Reject Ho (v) Ho: B1 less than or equal to 0 H1: B1 > 0 B1* = Ho + T(r,df)S(B1) . display invttail(524,.05) 1.6477668 . display invttail(524,.05)*.053248 .08774028 Critical B1 < Sample B1 so Ho is rejected . reg wage educ Source | SS df MS Number of obs = 526-------------+------------------------------ F( 1, 524) = 103.36 Model | 1179.73204 1 1179.73204 Prob > F = 0.0000 Residual | 5980.68225 524 11.4135158 11....
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Hw2 - Gregory Smith Econometrics Problem Set 2 C1.1(i We...

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