Economics 571 Problem Set #8 Solutions The regression output is provided as a separate attachment. (1a) Generally the results are consistent with what I would expect. In terms of point estimates, if the spouse earns more, than the female is likely to work
Economics 571 Problem Set #4 Solutions (1) Using the formula 2 = [1/(n 2)] with n = 8, we obtain 2 = .0725. As for the estimated variances, we make use of the formulas Var(1 ) = and Var(0 ) = to obtain Var(1 ) = .0013 and Var(0 ) = .8625. (2) It is straig
Economics 571 Problem Set #5 Solutions (1a) In vector and matrix form, the regression equation for all the data can be written as
2.8 3.4 3.0 3.5 3.6 3.0 2.7 3.7
=
1 1 1 1 1 1 1 1
21 24 26 27 29 25 25 30
+
0 1
u1 u2 u3 u4 u5 u6 u7 u8
,
where ui
Economics 571 Problem Set #2 Solutions (1a) Pr(X 7) = Pr([X 3]/4 [7 3]/4) = Pr(Z 1) = .841 In the above Z N (0, 1), and the last entry is read from the Normal tables (815 and 816 of your book). (1b) Pr(X > 5) = Pr([X 3]/4 > [5 3]/4) = Pr(Z > 1/2) = 1 Pr(Z
Economics 571 Problem Set #3 Solutions (1) Note: y = 0 + 1 x + u = 0 + 1 x + 0 + (u 0 ) = (0 + 0 ) + 1 x + = 0 + 1 x + where 0 = 0 + 0 and = u 0 . Note E( ) = E(u 0 ) = E(u) 0 = 0 0 = 0. Thus, the regression model can be written as one with a new intercep
Economics 571 Problem Set #6 Solutions Wooldridge, 3.9 (i) I would expect 1 to be negative and 2 to be positive. The more pollution in a given community, the less someone would be willing to pay for a home in that community (all else equal), so that 1 sho
Economics 571 Problem Set #9 Solutions (1i) We would certainly worry about an omitted variables problem here. Things like parental education, support, income, etc. probably enter the error term (i.e., they are likely to have independent effects on GPA), a
Economics 571 Problem Set #7 (1) Go back to problem set #6, question C4.1 in Wooldridge. Carry out the test in (iii) that the increase in As expeditures is oset by an increase in Bs expenditures. In this case, perform the test by running the appropriate r
Economics 571 Problem Set #7 Solutions (1) First, note that the null imposes the restriction 1 = -2 . Thus, the restricted model can be written as voteA = 0 + 1 (logexpendA - logexpendB) + beta3 prtystrA + u.
2 We run both the restricted and unrestricted