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Homework2-AK

# Homework2-AK - Homework 2 ECO 7427 ANSWER KEY Prof Sarah...

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1 Homework # 2 ECO 7427 ANSWER KEY Prof. Sarah Hamersma 1. For your data work this week, I would like you to do exercise 5.4 in Wooldridge (all parts). The data are available on the shared drive in the Economics department or on Wooldridge’s website at: http://www.msu.edu/~ec/faculty/wooldridge/book2.htm The paper you will replicate is Card 1995. It was published in a book, but there are copies of the working paper version online (NBER # 4483) for your reference. Wooldridge Ch 5-4 Here is my Stata code, with the verbal answers to the questions embedded in it. ------------------------------------------------------------------------------- log: G:\Wooldridge5-4.log log type: text opened on: 16 Feb 2005, 11:03:07 . . . * Sarah Hamersma . * 2/15/05 . * program name: Wooldridge5-4.do . . * This program provides an answer key to Wooldridge question 5.4 . . #delimit ; delimiter now ; . use "H:\Wooldridge Data\CARD.DTA", clear; . * Part a ; . gen logwage = log(wage); . regress logwage educ exper expersq black south smsa reg661 reg662 > reg663 reg664 reg665 reg666 reg667 reg668 smsa66; Source | SS df MS Number of obs = 3010 -------------+------------------------------ F( 15, 2994) = 85.48 Model | 177.695591 15 11.8463727 Prob > F = 0.0000 Residual | 414.946054 2994 .138592536 R-squared = 0.2998 -------------+------------------------------ Adj R-squared = 0.2963 Total | 592.641645 3009 .196956346 Root MSE = .37228 ------------------------------------------------------------------------------ logwage | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- educ | .0746933 .0034983 21.35 0.000 .0678339 .0815527 exper | .084832 .0066242 12.81 0.000 .0718435 .0978205 expersq | -.002287 .0003166 -7.22 0.000 -.0029079 -.0016662

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2 black | -.1990123 .0182483 -10.91 0.000 -.2347927 -.1632318 south | -.147955 .0259799 -5.69 0.000 -.1988952 -.0970148 smsa | .1363845 .0201005 6.79 0.000 .0969724 .1757967 reg661 | -.1185698 .0388301 -3.05 0.002 -.194706 -.0424335 reg662 | -.0222026 .0282575 -0.79 0.432 -.0776088 .0332036 reg663 | .0259703 .0273644 0.95 0.343 -.0276846 .0796251 reg664 | -.0634942 .0356803 -1.78 0.075 -.1334546 .0064662 reg665 | .0094551 .0361174 0.26 0.794 -.0613623 .0802725 reg666 | .0219476 .0400984 0.55 0.584 -.0566755 .1005708 reg667 | -.0005887 .0393793 -0.01 0.988 -.077802 .0766245 reg668 | -.1750058 .0463394 -3.78 0.000 -.265866 -.0841456 smsa66 | .0262417 .0194477 1.35 0.177 -.0118905 .0643739 _cons | 4.739377 .0715282 66.26 0.000 4.599127 4.879626 ------------------------------------------------------------------------------ . * This lines up perfectly with Card's Table 2, column 2. The only > * difference is that Card uses "expersq/100" as his regressor so > * his coefficient is exactly 100 times the size of ours (but this > * affects the std error the same way, so the significance level > * is identical). This is a useful place to note that it can be easier > * for the reader if you scale variables for which the coefficient
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Homework2-AK - Homework 2 ECO 7427 ANSWER KEY Prof Sarah...

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