Assignment -

The table created in this assignment is on the exam with several similar question. This assignment requires the data set "AddHealthWave 4.dta" available on Carmen. (If you have an old version of STATA, you can use the data labeled old stata AddHealth)

1. Estimate each of the following equations and create a regression result table similar to those completed in previous homeworks. Use variable labels, display the R², assign stars for p-values of 0.01, 0.05, and 0.10. Note: You must create the degree level dummies from the variable degree. The variables bachelors graddeg doc pro hsgrad are not the same thing.

(a) Earnings = β₀ + β₁age + β₂age² + β₃female + β₄H.S.Diploma + β₅Bachelors + β₆Masters + β₇DoctorateorProfessional + β₈NumberofJobs + e

(b) Earnings = β₀ + β₁age + β₂age² + β₃female + β₄H.S.Diploma + β₅Bachelors +β₆Masters + β₇DoctorateorProfessional + β₈NumberofJobs + β₉Hrs/W kinPrimaryJob + e

(c) ln(Earnings) = β₀ + β₁age + β₂age² + β₃female + β₄H.S.Diploma + β₅Bachelors + β₆Masters + β₇DoctorateorProfessional + β₈NumberofJobs + β₉Hrs/W kinPrimaryJob + e

(d) ln(Earnings) = β₀ + β₁age + β₂age² + β₃female + β₄NumberofJobs + β₅Hrs/W kinPrimaryJob + e

(e) ln(Earnings) = β₀ +β₁age + β₂age² + β₃female + β₄HighestDegree + β₅NumberofJobs + β₆Hrs/W kinPrimaryJob + β₇female ∗ HighestDegree + e

2. Interpret the coefficient on H.S. Diploma in column 1 and again in column 3.

3. Interpret the coefficients on female, highest degree, and female*highest degree in column 5.

4. For the regressions run in part (a) and part (b), are returns to age, increasing, decreasing, or constant? Explain.

5. Calculate a confidence interval on the female coefficient in part (c).

6. Use an F-test to test the joint significance of the degree dummies from part (c).

7. Use an F-test to test the joint significance of all variables in part (a).

8. The coefficient on number of jobs changes drastically between part (a) and part (b). Explain why.

9. Using our specification search criteria. Choose your preferred specification and explain why.