View the step-by-step solution to:

Question

This question was created from smt4 - S17.pdf https://www.coursehero.com/file/29411435/smt4-S17pdf/

29411435-383334.jpeg
29411435-383334.jpeg

1wage |
Coef.
Std. Err.
t
P>It/
[95% Conf. Interval]
educ |
. 0552406
. 0058354
X . XX
X . XXX
. XXXXXXX
. XXXXXXX
south |
- . 0819054
. 048621
-X . XX
X . XXX
. XXXXXXX
. XXXXXXX
urban |
. 1840049
. 0362901
X . XX
X . XXX
. XXXXXXX
. XXXXXXX
south_urban |
-. 0724757
. 0583629
-X . XX
X . XXX
- . XXXXXXX
. XXXXXXX
_cons |
5. 946937
. 0853035
XX . XX
X . XXX
X . XXXXXXX
X . XXXXXXX
a. Please interpret the coefficient on the interaction between south and urban in terms of the
returns of living in a city. Please test whether is significantly different from zero at the 90%
level .
b. You are unhappy with the regression in "a" since there are non-linear effects of education.
Instead, we estimate the following
log( wage) = Bo + Bedu + B,south + Byurban+ BAsouth * urban+ Bedu' + Boedu' tu
edu' and edu' are education squared and education raised to the power of 3. The rest of the
variables are as defined in "a". The results of regressing this model are:
Source |
SS
df
MS
Number of obs =
935
F( 6,
928) =
28.56
Model | 25. 8219949
6 4. 30366581
Prob > F
0 . 0000
Residual | 139. 834288
928
1506835
R-squared
0 . 1559
Adj R-squared =
0 . 1504
Total | 165. 656283
934
. 177362188
Root MSE
. 38818
1wage |
Coef.
Std. Err.
t
P > It|
[95% Conf. Interval]
educ | -. 6084499
. 5193148
-X . XX
X . XXX
-1 . 627618
. 4107176
south |
-. 0826128
. 0486587
-X . XX
X . XXX
-. 1781066
012881
urban |
1833713
0362819
X . XX
X . XXX
. 1121673
2545753
south urban | -. 0742973
. 058378
-X . XX
X . XXX
-. 1888654
. 0402708

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Let our 24/7 Econometrics tutors help you get unstuck! Ask your first question.
A+ icon
Ask Expert Tutors You can ask You can ask ( soon) You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors