Hw3 - Gregory Smith 9/29/2009 Dr. Cuellar Econ Problem Set...

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Unformatted text preview: Gregory Smith 9/29/2009 Dr. Cuellar Econ Problem Set #3 1. Using data set CEOSAL2.dta estimate the regression: Salary = 0 + 1 ceoten + u. (i) . reg salary ceoten Source | SS df MS Number of obs = 177-------------+------------------------------ F( 1, 175) = 3.65 Model | 1241694.06 1 1241694.06 Prob > F = 0.0577 Residual | 59524270.7 175 340138.69 R-squared = 0.0204-------------+------------------------------ Adj R-squared = 0.0148 Total | 60765964.7 176 345261.163 Root MSE = 583.21------------------------------------------------------------------------------ salary | Coef. Std. Err. t P> | t | [95% Conf. Interval]-------------+---------------------------------------------------------------- ceoten | 11.74613 6.14774 1.91 0.058 -.387127 23.87939 _cons | 772.4263 65.67567 11.76 0.000 642.8079 902.0446------------------------------------------------------------------------------ . predict salaryhat (option xb assumed; fitted values) . display 772.4263+( 11.74613*10) 889.8876 . display 772.4263+( 11.74613*10) 889.8876 for 10 years at the company (ii) . gen MEM=invttail(175, .05/2)*SEM . su MEM if ceoten==10 Variable | Obs Mean Std. Dev. Min Max 1000 2000 3000 4000 5000 10 20 30 40 years as ceo with company 1990 compensation, $1000s Fitted values UCIM LCIM------------+-------------------------------------------------------- MEM | 8 90.00574 0 90.00574 90.00574 The lower bound is 889.8876 - 90.00574 = 799.8818 The upper bound is 889.8876 + 90.00574 = 979.8933 We are 95% confident that a CEO with 10 years of experience will make between 799.8818 and 979.8933. (iii) . gen UCIM = salaryhat+MEM . gen LCIM = salaryhat-MEM . scatter salary salaryhat UCIM LCIM ceoten, c(. l l l) s(oh i i i) MEI 8 1154.552 0 1154.552 1154.552 Variable Obs Mean Std. Dev. Min Max . su MEI if ceoten==10 . gen LCII = salaryhat-MEI . gen UCII = salaryhat+MEI . gen MEI=invttail(175, .05/2)*SEI . predict SEI, stdf (iv) . display 889.8876+ 1154.552 2044.4396 . display 889.8876- 1154.552-264.6644 We are 95% confident that an individual CEO with 10 years of experience will have a salary between -264.6644 and 2044.4396. 1000 2000 3000 4000 5000 10 20 30 40 years as ceo with company 1990 compensation, $1000s Fitted values UCII LCII (v) . scatter salary salaryhat UCII LCII ceoten, c(. l l l) s(oh i i i) (vi). predict SEI, stdf . gen MEI=invttail(175, .05/2)*SEI . gen UCII = salaryhat+MEI . gen LCII = salaryhat-MEI . su MEI if ceoten==20 Variable | Obs Mean Std. Dev. Min Max-------------+-------------------------------------------------------- MEI | 4 1163.501 0 1163.501 1163.501 . display 772.4263+( 11.74613*20) . ....
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This note was uploaded on 03/08/2011 for the course ECON 304 taught by Professor Eyler during the Spring '07 term at Sonoma.

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Hw3 - Gregory Smith 9/29/2009 Dr. Cuellar Econ Problem Set...

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