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

1 the crr model european claimconsider the crr model of

1. The CRR model: European claim. Consider the CRR model of stock price S with T periods and parameters d (a) Consider the European claim X with expiry date T and the payoff X = g(S r ) = 1/S T 1[k,∞)(S T ). Show that th ...

Short paperthus far in the course the primary focus has

Short Paper Thus far in the course, the primary focus has been on hospitals within the healthcare industry. For this short paper you will consider the economic issues related to long-term care facilities. In this assignm ...

Assignmentvisit wwwlovemarkscom and share your thoughts on

Assignment Visit www.lovemarks.com and share your thoughts on Branding and Pricing as it relates.....to "The Future Beyond Brands." Check out the Love/Respect Axis and see just where your favorite brand is sitting. (lmnu ...

Intermediate microeconomics assignmentexercise 1 -

INTERMEDIATE MICROECONOMICS ASSIGNMENT Exercise 1 - Capturing surplus using a block pricing Consider a monopolist facing a linear demand p(q) = 20 - q, and marginal cost MC = 2. a) If the monopolist charges the same pric ...

Great depression economy paperwritten assignmentplease

Great depression , economy paper Written Assignment Please provide a comprehensive answer to the following two questions: 1) Which were the main causes of the Great Depression? 2) Why did the Great Depression last so lon ...

Assignmentfirms use inputs workers machinery natural

Assignment Firms use inputs (workers, machinery, natural resources) to produce outputs (goods and services). For example: General Motors uses steel, rubber and other materials to create automobiles. A pizza restaurant tu ...

Assignment land restoration proposalpart 1please see

Assignment: Land Restoration Proposal Part 1 Please see attachment for part 1 and only complete highlighted section for this assignment. Your team has been given the land rights to a 100-acre abandoned parcel of land. Th ...

Economics and quantitative analysis assignmenttopic -

ECONOMICS AND QUANTITATIVE ANALYSIS ASSIGNMENT TOPIC - REGRESSION ANALYSIS Instructions - Background One of the biggest challenges in the higher education sector has been the recent growth of online universities. The Onl ...

Here is a link to the pdf version of dan ariellys

Here is a link to the pdf version of Dan Arielly's Predictably Irrational. http://radio.shabanali.com/predictable.pdf The Table of Contents starts on page 11. Scan through it and choose a chapter that looks interesting. ...

Assignmentdraw the graph carefully please use one graph

Assignment Draw the graph carefully. Please use one graph per country and show both the autarkyand the free trade equilibrium on each graph. Consider the following data on the factor endowments of two countries A and B: ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro