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practiceproblems - PADP 8130 Fertig Spring 2012 ...

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Unformatted text preview: PADP 8130 Fertig Spring 2012 UGA Practice Problems for the Midterm 1. What is the difference between the standard deviation and the standard error? Explain using equations and words. 2. What does the Central Limit Theorem say about the sampling distribution? 3. What does the Gauss- Markov Theorem state? 4. Describe 2 procedures you can do to see if the inverse of a square matrix exists? 5. True or False. In a model with dummy variables, the omitted category matters because it determines the sign of the OLS coefficient. Explain your answer. 6. Using the regression below, explain what is wrong with the following statement: “Female- headed households have significantly lower family incomes because female heads have a lower level of education than male heads on average.” Source | SS df MS Number of obs = 7874 -------------+-----------------------------F( 9, 7864) = 509.38 Model | 2691.3033 9 299.0337 Prob > F = 0.0000 Residual | 4616.56119 7864 .587049999 R-squared = 0.3683 -------------+-----------------------------Adj R-squared = 0.3676 Total | 7307.86448 7873 .92821853 Root MSE = .76619 -----------------------------------------------------------------------------lnfaminc | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------agehd | .0588569 .0028292 20.80 0.000 .0533109 .0644028 age2 | -.0005824 .0000277 -21.05 0.000 -.0006366 -.0005282 black | -.2795837 .0198465 -14.09 0.000 -.3184881 -.2406794 hisp | -.0913031 .0334106 -2.73 0.006 -.1567966 -.0258095 femalehd | -.2232375 .0239106 -9.34 0.000 -.2701086 -.1763663 marriedhd | .557765 .0231511 24.09 0.000 .5123827 .6031472 hsdropout | -.3412199 .0250994 -13.59 0.000 -.3904214 -.2920185 somecoll | .2085378 .0226856 9.19 0.000 .164068 .2530075 collgrad | .4386241 .0242743 18.07 0.000 .3910401 .4862082 _cons | 9.152484 .0668183 136.98 0.000 9.021503 9.283466 ------------------------------------------------------------------------------ 7. If I ran the following command after the regression listed above, what did I just ask Stata to test? Write out the hypothesis and interpret the results. . test ( 1) ( 2) ( 3) hsdropout somecoll collgrad hsdropout = 0 somecoll = 0 collgrad = 0 F( 3, 7864) = 278.58 Prob > F = 0.0000 8. The estimated coefficient on years of completed education on log family income is 0.127 with a standard error of 0.004. a. What is the t- statistic (assuming that the null hypothesis is that the effect of education is 0)? b. What is the 95% confidence interval on this point estimate. c. Finally, show the formula for the marginal effect of education on family income and calculate the actual value. 9. A referee writes in his/her report that he/she is concerned about whether you should combine single and married households into one regression. Assume that your dependent variable is log family income, your independent variable is education of the head, and your control variables include age and age- squared. What test should you run to defend your approach? Describe the test procedure and intuition. ...
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