Exam 2 - Solutions - PAM 3100: Second Preliminary Exam...

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Unformatted text preview: PAM 3100: Second Preliminary Exam (11/8/2010) In-Class Professor Lovenheim Instructions PLEASE READ CAREFULLY before starting. This test has a total of 100 points and has a total of 2 questions with sub-parts. The amount each sub-part is worth is listed next to each question. There are a total of 16 questions. You have 75 minutes for the exam. We will take off points if you use generic variables, such as X and Y, without first defining them. You either should use variable names when answering questions or state clearly what generic variables stand for. If I define a variable in the problem setup, you can use this variable without defining it. You are allowed to use a non-programmable calculator. If you use a programmable calculator, your exam will be taken and you will not receive credit. If you have questions about a calculator, ask before the exam starts . Cell phones and PDAs are not allowed to be out during the exam. Shut off cell phones and put them away. If we see a cell phone out during the exam, your exam will be taken and you will not receive credit. Show your work! No credit will be given for correct answers with no justification. Please try to make sure that your handwriting is legible. [I know, the hypocrisy is hilarious.] In response questions, be precise but brief . If a correct reply is hidden among wrong, or irrelevant, arguments, you will not get full credit. We will grade only what is written in your blue books. Ask if you need a second book. If you cannot solve one subquestion do not skip the rest of the question. Attempt to solve each subquestion. When the exam is finished, hand in the bluebook and the exam paper . I will post the exam with answers later. Please do not turn this page over until you are instructed to do so! 1 1 (80 Points) You are interested in estimating the returns to college quality. You have data on college of grad- uation and hourly wages among four-year college graduates. You split the four-year college sector into 3 mutually exclusive and exhaustive groups of quality: highly selective, selective, and non- selective. You estimate the following regression: wage = + 1 highly selective + 2 selective + 3 mathscore + 4 faminc + 5 mothed + 6 fathed + 7 male + u . The variable definitions are as follows: wage =hourly wage highly selective = 1 if the respondent graduated from a highly selective university and =0 otherwise selective = 1 if the respondent graduated from a selective university and =0 otherwise nonselective = 1 if the respondent graduated from a non-selective university and =0 otherwise mathscore = high school math test score faminc = respondents parents income mothed = respondents mothers education (in years) fathed = respondents fathers education (in years) male = dummy=1 if respondent is male The results from this regression are shown in column (i) of the table below, with the standard errors in parentheses: 2 Independent Variable...
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This note was uploaded on 01/30/2012 for the course PAM 3100 at Cornell University (Engineering School).

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Exam 2 - Solutions - PAM 3100: Second Preliminary Exam...

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