Exercise 1

Exercise 1 - Economics 241B Problem Set 1 1. Scaling and R2...

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Economics 241B Problem Set 1 1. Scaling and R 2 You are studying student test scores. To determine the impact of teachers on education, school characteristics and teacher characteristics (with a linear regres- sion). You obtain an R 2 of 0 : 30 , which you include as part of your presentation to the school board. a. One member of the board asks you to explain what R 2 indicates and whether a value of 0 : 30 is large enough for you to draw conclusions from your analysis. Please respond. b. A few moments later, a member of the audience states that parental income should be measured in increments of $10,000 (so that an income of $90,000 would me measured as 9). You note that your analysis measured parental income in increments of $1,000. The audience member asks if you change the parental income measurement to units of $10,000, would any of your reported estimates change (and, in particular, would the estimated R
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This note was uploaded on 12/26/2011 for the course ECON 241b taught by Professor Staff during the Fall '08 term at UCSB.

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Exercise 1 - Economics 241B Problem Set 1 1. Scaling and R2...

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