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Unformatted text preview: Economics 104 PS6 Solutions Molin Zhong November 16, 2011 1 Problem 8.10 1.1 Part A y = + 1 ( x 1 + x 1 )+ 2 x 2 + 3 ( x 1 + x 1 ) x 2 ( + 1 x 1 + 2 x 2 + 3 x 1 x 2 ) y = 1 x 1 + 3 x 1 x 2 y x 1 = 1 + 3 x 2 1.2 Part B y = + 1 x 1 + 2 ( x 2 + x 2 )+ 3 ( x 1 ( x 2 + x 2 )) ( + 1 x 1 + 2 x 2 + 3 x 1 x 2 ) = 2 x 2 + 3 x 1 x 2 y x 2 = 2 + 3 x 1 1.3 Part C y = + 1 ( x 1 + x 1 )+ 2 ( x 2 + x 2 )+ 3 (( x 1 + x 1 )( x 2 + x 2 )) ( + 1 x 1 + 2 x 2 + 3 x 1 x 2 ) = ( 1 + 3 x 2 ) x 1 + ( 2 + 3 x 1 ) x 2 + 3 x 1 x 2 2 Problem E8.2 2.1 Part A Here is the output from the regression: 1 2.2 Part B Here is the output from the regression: Because the tstatistics are not significant at the 95 % level for age squared, there is no evidence that age has any nonlinear effect on beauty when controlling for other factors. Taking an Ftest jointly testing age and age squared beingfor other factors....
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This note was uploaded on 02/29/2012 for the course GG 101 taught by Professor Gg during the Spring '12 term at UPenn.
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