Problem Set 6
Econometrics I
Due 4/5
Resource Economics 702
1.
The following model was specified to estimate the effects of human capital on U.S. wages:
2
0
1
2
i
3
.
i
i
i
i
i
i
i
i
i
f
f
u
p
h
wage
yrsed
xp
xp
fe
xpfe
unioncov
pension
hinspd
u
e
e
e
The data are from the 2004 Current Population Survey and are available on the course website under
Problem Sets. Data definitions/descriptions are provided in a separate sheet in the Excel file.
(2)
a. Review your results. Which variables are statistically significant?
Would you suggest dropping some of
the variables from the model?
(2)
b. Using the specification above, write explicitly the null hypothesis implied by the following sentence and
complete a test of that null hypothesis:
“There are no gender differences in wages; all differences can be
explained by human capital differences.”
Are your results consistent with your conclusions from part a?
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 Spring '08
 STAFF
 Statistics, Econometrics, Null hypothesis, Statistical significance, Implied volatility, Statistical power

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