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# HW06_answers_Econ140A_2011Fall - Economics 140A Fall 2011...

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Economics 140A Fall 2011 Professor Startz Sketched Answers to Homework 6 Part I 1. The regression and forecast plot look as follows: Dependent Variable: ADMIT Method: Least Squares Date: 11/27/06 Time: 09:30 Sample: 1 1643 IF LSAT>99 AND LSAT<200 AND GPA<=4 Included observations: 1567 Coefficient Std. Error t-Statistic Prob. C -1.113004 0.105372 -10.56264 0.0000 GPA 0.413795 0.030776 13.44525 0.0000 R-squared 0.103550 Mean dependent var 0.296107 Adjusted R-squared 0.102977 S.D. dependent var 0.456685 S.E. of regression 0.432532 Akaike info criterion 1.162954 Sum squared resid 292.7862 Schwarz criterion 1.169791 Log likelihood -909.1746 Hannan-Quinn criter. 1.165496 F-statistic 180.7747 Durbin-Watson stat 1.970672 Prob(F-statistic) 0.000000

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page 2 The sign of GPA is positive, which makes sense. The change from a 3.5 to 4.0 GPA looks like about a change from .3 to .5 in the chance of getting admitted. The chance of admission with a 2.5 GPA is about -0.1, which is both unkind and impossible. 2. The probit looks like Dependent Variable: ADMIT Method: ML - Binary Probit (Quadratic hill climbing) Date: 11/27/06 Time: 09:25 Sample: 1 1643 IF LSAT>99 AND LSAT<200 AND GPA<=4 Included observations: 1567 Convergence achieved after 5 iterations Covariance matrix computed using second derivatives Coefficient Std. Error z-Statistic Prob. C -5.693418 0.415770 -13.69366 0.0000 GPA 1.491812 0.118767 12.56086 0.0000 McFadden R-squared 0.098182 Mean dependent var 0.296107 S.D. dependent var 0.456685 S.E. of regression 0.428890 Akaike info criterion 1.098315 Sum squared resid 287.8763 Schwarz criterion 1.105152 Log likelihood -858.5299 Hannan-Quinn criter. 1.100857 Restr. log likelihood -951.9992 LR statistic 186.9385 Avg. log likelihood -0.547881 Prob(LR statistic) 0.000000
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