Prof. Erdin
ECO 310
HOMEWORK #2 SOLUTIONS
Due: October 21, 2010 (5 p.m. in oce 310)
Total: 100 points
Problem 1.
(10+5+5+10+5+5=40 points) Consider an equation to explain salaries
sales ), return on equity (roe ) and return on
of CEOs in terms of annual r
LM (Lagrange multiplier) Test on Non-linearities and Model
Specification
Data 4-8
sub= Subscription Rate, number of subscribers (demand for cable
TV)=Dependent Variable
home= Number of homes passed by each system
inst= installation fee
svc= monthly servic
Dummy Variable Approach for Wage Determination Process
Data 7-2
Is there gender discrimination against female salaries?
wage= dependent variable
Quantitative Variables:
educ= years of education beyond eight grade
exper= number of years at the company
age=
Prof. Erdin
ECO 310
CLASS EXERCISES: UNBIASEDNESS & VARIANCE
Given
Sxy
=
Sxx
V ar(Sxy )
2
Sxx
V ar(b) =
Remark
1. : We can write
Y ) (n 1)
Sxy = Cov(X,
Sxx = V ar(X) (n 1)
Since
Sxy =
=
=
X
xi +
X
X
=
X
P
xi X
yi
n
xi yi
P
xi X
( + xi + ui )
n
xi ( +
Heteroskedasticity
Richard Williams, University of Notre Dame, http:/www3.nd.edu/~rwilliam/
Last revised January 30, 2015
These notes draw heavily from Berry and Feldman, and, to a lesser extent, Allison, and Pindyck and Rubinfeld.]
What heteroskedasticit
Applied Econometrics
2nd homework
Aizhan Borubaeva
Nurgul Ukueva
1. The first step would be to run Fixed Effects (FE) regression in Stata with given data
use "C:\Users\user\Downloads\WAGEPAN.DTA", clear
. xtreg lwage manuf exper union agric educ hours con
Aizhan Borubaeva
3rd homework
Applied Econometrics
Nurgul Ukueva
1. Do-File editors commands:
clear
use "C:\Users\user\Downloads\WAGEPAN.DTA", clear
xtset nr year
xtreg lwage year hours married educ union expersq exper, fe
estimates store fixed
xtre