Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

1. Consider the following equation relating percent share of the vote that the incumbent candidate gets in an election to campaign spending in an election cycle. Pctshare refers to percent of the vote obtained by the incumbent and incexp refers to dollars (in units of hundreds of thousands) spent on advertising by the incumbent.  The equation is estimated using hundreds of U.S. Congressional elections in the last ten years.

Pctshare = 51.6 - 0.312 incexp
                (16.5)    (1.8)
n = 3542  R2 = 0.233

a.) Interpret the intercept in this equation. Interpret the slope in this equation.

b.) What is the predicted incumbent share of the vote if he or she spends one million dollars in an election cycle?

c.) What sign would you expect on incexp? Why? Discuss a reason why the coefficient might be biased. Give reasoning for the direction of the bias for what direction you decide.

d.) Is the coefficient on incexp significant at the 5% level? At the 10% level?  Use a t-statistic for your answer.

2. 100 schools are given exactly one million dollars each in grant money. They can spend the money on any or all of three programs: math tutoring (math), kickball lessons (kickball), or computer literacy (computer). All the money must be spent on a combination of the three programs at each school. The grant money is intended to improve SAT scores.

a. Why would it not make sense to estimate the following model? describe.
SAT score =     β0 + β1 math + β2kickball + β3 computer

b. Indicate how the problem could be fixed so estimation can be possible.

3. A study is done analyzing the average length of stay (in days) for hospital visits. The following equation is estimated for 1,000 patients:
 Length = 3.1 + .24 cigarettes - .15 obesity + .86 prescrip - .023 cholesterol 
              (1.5)      (.17)                 (.82)              (1.85)            (.062)
 
n = 1,000   R2 = 0.383

Where cigarettes are the number of packs of cigarettes smoked per day, obesity is the number of pounds a patient is over the obesity threshold for their age and height, prescrip is the number of prescription pills taken each day, and cholesterol is the patient’s blood cholesterol level.  Despite standard errors being high and t-stats being low, an F-test reveals the last three variables of obesity; prescript and cholesterol are jointly highly significant.

The equation is re-estimated dropping the variables obesity and cholesterol:
Length = 3.1 + .44 cigarettes + .76 prescrip 
             (1.1)      (.21)                   (.22) 
 
n = 1,000   R2 = 0.343

find out the t-statistic on prescrip in the new and old regression. What is the most likely reason that the standard error for prescrip is much lower in the new regression?

4. The median starting salary for new law school graduates is determined by:

Log (salary) =    β0 + β1LSAT +   β2GPA+ β3log (libvol) + β4log (cost) + β5rank + u

Where LSAT is the median LSAT score for the graduating class, GPA is the median college GPA for the class, libvol is the number of volumes in the law school library, cost is the annual cost of attending law school, and rank is a law school ranking (with rank = 1 being the best.)

a. describe why we expect β5 ≤ 0     .

b. What signs do you expect on the other slope parameters? Justify your answers.

c. For a set of law schools, the above estimated equation is:
 
Log(salary) =8.34 +.0047LSAT + .248GPA+ .095log(libvol) + .038 log(cost) + -.0033rank 
 
n = 136 R2 = 0.842

What is the ceteris paribus difference in salary for schools with median GPA different by one point? (Interpret your answer as a percentage.)

d. Interpret the coefficient on the variable log (libvol)

e. Would you say it is better to attend a higher ranked law school? How much is a difference in ranking of 20 worth in terms of starting salary?

5. Consider the following relationship between number of pieces of candy eaten per day and pounds gained per month:
 
Person    Candy    Pounds
 
1               3            6
2               5            7
3               1            2
4               8           10
5               3            5
 
a. Estimate the relationship between candy and pounds using OLS. That is obtain the intercept and slope intercepts in the equation:

Pounds = β01Candy

b. What is the predicted number of pounds gained per month if someone eats 2 pieces of candy per day?

c. How much of the variation in pounds gained is describeed by pieces of candy eaten? In other words: What is R2 for this regression?

6. Consider the following (familiar) equation which estimates the number of hours of sleep per year that someone gets as a function of hours worked per year (totwork), education (in years) and age. Suppose this equation is estimated using a new data set of 64 people and the results are
 
Sleep = 3434.8 - .118 totwork -   12.05 education +2.35 age
              (115.71)       (.025)                  (3.25)           (1.01)

n = 64   R2 = 0.185

a. Test the null hypothesis that the coefficient on education is equal to 6 at the 5% level.

b. Dropping age and education from the equation yields the following estimate:
 
Sleep = 3288.0 - .127 totwork
             (47.21)     (.028) 

n = 64    R2 = 0.141

Are education and age jointly significant at the 5% level? Justify your answer.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91514

Have any Question? 


Related Questions in Microeconomics

Why do we not classfied money as factors of

Why do we not classfied money as factors of production

Assignmentconcepts you should knowa organisational

Assignment Concepts you should know: a. Organisational Structure b. Physical structure of organisations c. Bureaucracy d. Organic versus Mechanistic organisational structures e. Symbolic conditioning f. Routine and impro ...

Assignmentquestion 1 how is a project baseline used to

Assignment Question 1) How is a project baseline used to guide the execution of the project's work, to evaluate progress and performance, and to control the project? Also, as you continue to think about monitoring and co ...

Businesses should examine various internal methods of

Businesses should examine various internal methods of financing or nonbank sources of credit as opposed to obtaining a bank loan. Read "Entrepreneurship In Action - Where Do we Turn Now?" on page 504. Answer these questi ...

Answer all of the following questions in microsoft word

Answer all of the following questions in Microsoft Word file with complete questions and answers and attach it. 1. Consider the markets for e-books, e-readers (e.g. kindle), and physical copies of books. For each of the ...

Economics money bankingintroductioneconomics money and

Economics Money Banking Introduction Economics Money and Banking focuses on the traditional model of money and banking in the American banking system, a mixed capitalist economy. The course explains the functions of mone ...

Economics assignmentassignment is due tomorrow sunday

Economics assignment ASSIGNMENT IS DUE TOMORROW SUNDAY 09/18/16 AT 10AM APA NEEDED FOR TOM MUTUNGA ONLYYYYYYYYYYYYYYY Option Identify at least two professional organizations in your chosen field. Research the organizatio ...

Assignment external financinggenesis energys newly

Assignment: External Financing Genesis Energy's newly established operations management team decided to seek outside assistance in developing a long-term operating plan that also addresses the financial issues identified ...

Assignment 2 operations decisiondetermine the market

Assignment 2: Operations Decision Determine the market structure in which the low-calorie frozen, microwavable food company operates. Use the Internet to research two of the leading competitors in the low-calorie frozen, ...

Assignmentprepare a 600-word paper not including title

Assignment Prepare a 600-word paper , not including title page and references on The history and application of Kaizen to Process Improvement. You will research your choice of this topic and work to determine the impact ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate