Exercise 4

Exercise 4 - University of California Department of...

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University of California D. Steigerwald Department of Economics Economics 140A Exercise 4 1. You are asked to determine the effects of various qualities on a person’s level of income. Specifically, these qualities are sex and level of educational achievement. You decide to employ the following definitions for a sample of n individuals 1 i S if i is male and 0 i S if i is female, 1 i E if i is a college graduate and 0 i E if i is not a college graduate. You are considering the following models for income i Y i i i U E Y 1 0 (1) and i i i i V S E Y 2 1 0 (2) where i U and i V are i.i.d. Gaussian random variables with mean zero. You have at your disposal data on group averages. M Y represents the average income of males, F Y represents the average income of females, G Y represents the average income of college graduates, NG Y represents the average income of non-college graduates, G , M Y represents the average income of male college graduates, G , F Y represents the average income of female college graduates, NG , M Y represents the average income of males who did not graduate from college,
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This note was uploaded on 09/04/2011 for the course ECON 140a taught by Professor Staff during the Fall '08 term at UCSB.

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Exercise 4 - University of California Department of...

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