# ecm06-hw3 - ECN 140/Winter 06 Econometrics ASSIGNMENT 3 100...

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ECN 140/Winter 06 1 Econometrics ASSIGNMENT 3 100 POINTS TOTAL DUE: by Tuesday, March 14 , 3:20 p.m. **IMPORTANT REMINDER: LATE ASSIGNMENTS CANNOT BE ACCEPTED – NO EXCEPTIONS** Note : Apart from Questions 4, the rest of the questions are computer-assisted assignments. Partial answers for the estimation part of these later questions are provided below. However, do make an effort to answer the problems without referring to the solution keys initially. All output printouts from the computer-assisted assignments must be attached to the final answers that you plan to hand in for credit. Please refer to the Division of Social Sciences Computer Lab’s website at http://dsslab.ucdavis.edu/ for the free time periods available for you to do your computer assignments. 1. [15] Use: WAGE1.RAW a) Use OLD to estimate the equation 2 log( ) 01 2 3 wage educ exper exper u ββ β = ++ + + and report the result using the usual format. b) Is exper 2 statistically significant at the 1% level? c) Using the approximation n m m % 100( 2 ) , 23 wage exper exper ∆= + find the approximate return to the fifth year of experience. What is the approximate return to the twentieth year of experience? d) At what value of exper does the additional experience actually lower predicted log (wage)? How many people have more experience in this sample? Partial Solutions: a) The estimated equation is n log( ) wage = 0.128 + 0.0904 educ + 0.0410 exper – 0.000714 exper 2 (0.106) (0.0075) (0.0052) (0.000116) n = 526, R 2 = 0.300, 2 R = 0.296.

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ECN 140/Winter 06 2 2. [15] Use: WAGE2.RAW a) Estimate the model log( ) 01 2 3 4 5 6 7 wage educ exper tenure married black south urban u β ββ =+ + + + + + + + and report the results in the usual from. Holding other factors fixed, what is the approximate difference in the monthly salary between blacks and non-blacks? Is this difference statistically significant? b) Add the variable exper 2 and tenure 2 to the equation and show that they are jointly insignificant at even the 20% level.
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## This note was uploaded on 08/27/2011 for the course ECON 7043 taught by Professor Projim during the Three '11 term at University of Adelaide.

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ecm06-hw3 - ECN 140/Winter 06 Econometrics ASSIGNMENT 3 100...

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