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Economics 140A
Spring 2011
Professor Startz
Final
Name:
Student number:
.
Answer all 8 questions.
Note that questions are not all
worth the same number of points. Be sure to
show your work for each question. Please write your answers on the exam in the space provided after
each question. Please clearly label the part of the question you are answering.
Notice that there is some reference material provided after the questions. And some scrap paper too.
You may use a calculator, but no other electronic devices. (No phones or laptops for example.) The
exam is closed book. You may be asked to show your student id.
The exam is intended to take 2 hours, so you can have 2.5 hours. That’s a serious limit.
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1.
(25 points) Test the hypothesis that age doesn’t have any effect on hours worked.
Dependent Variable: HRSWK
Method: Least Squares
Date: 05/27/11
Time: 16:51
Sample: 1 135963 IF AGE>30 AND AGE<40
Included observations: 25893
Variable
Coefficient
Std. Error
tStatistic
Prob.
C
37.20197
22.88610
1.625527
0.1041
ED
1.110788
0.037509
29.61380
0.0000
AGE
1.271542
1.311295
0.969684
0.3322
AGE^2
0.020444
0.018706
1.092897
0.2744
Rsquared
0.033474
Mean dependent var
33.23435
Adjusted Rsquared
0.033362
S.D. dependent var
18.04617
S.E. of regression
17.74259
Akaike info criterion
8.589967
Sum squared resid
8149844.
Schwarz criterion
8.591228
Log likelihood
111206.0
HannanQuinn criter.
8.590375
Fstatistic
298.8720
DurbinWatson stat
2.171346
Prob(Fstatistic)
0.000000
Dependent Variable: HRSWK
Method: Least Squares
Date: 05/27/11
Time: 16:51
Sample: 1 135963 IF AGE>30 AND AGE<40
Included observations: 25893
Variable
Coefficient
Std. Error
tStatistic
Prob.
C
17.86174
0.529675
33.72208
0.0000
ED
1.113161
0.037514
29.67312
0.0000
Rsquared
0.032889
Mean dependent var
33.23435
Adjusted Rsquared
0.032852
S.D. dependent var
18.04617
S.E. of regression
17.74727
Akaike info criterion
8.590418
Sum squared resid
8154773.
Schwarz criterion
8.591048
Log likelihood
111213.8
HannanQuinn criter.
8.590621
Fstatistic
880.4942
DurbinWatson stat
2.179780
Prob(Fstatistic)
0.000000
page 3
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2.
(15 points, 5 for each subquestion) Assume that all our usual regression assumptions hold
for the data generating process
±
² ³´
±
µ ¶
±
, except that
·¸¹(¶
±
) ² º
»
´
±
»
. Consider the
estimator
³
̃
²
∑
±
´
±
¼
´
±
´
±
½
∑ ¼
´
±
´
±
½
»
²
¾
¿
À
±
´
±
a.
Prove
is unbiased.
b.
Find the variance of
.
c.
Note that if
±
² ³´
±
µ ¶
±
is a valid equation, then
Á
Â
Ã
Â
² ³
Ã
Â
Ã
Â
µ
Ä
Â
Ã
Â
is also a valid
equation. Thinking about this, prove that
³
̃
is the BLUE by cleverly citing the Gauss
Markov theorem.
page 5
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3.
(25 points) Using the CPS data, I ran a regression of log wages on education, dummy
variables for gender and race, as well as certain interactions. (To keep the output short, I
eliminated all observations on racial classifications other than white, black, and Asian.)
The EViews commands were
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This note was uploaded on 12/26/2011 for the course ECON 140a taught by Professor Staff during the Fall '08 term at UCSB.
 Fall '08
 Staff
 Economics

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