Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Statistics and Probability Expert

1. Using the dataset WAGE1.dta…

a) Regress wages on education and experience but do so in a way that produces standardized betas. That is, you will have to take each variable and standardize it by subtracting from it the mean and dividing by the standard deviation, i.e.x_standard= (x-x_bar)/x_std.

b) Interpretation the coefficients on education and experience?

c) Now regress log wage (already defined as “lwage” in the dataset) on education, experience, non white, female, married. Now run the same regression but including a variable that is the interaction between female and education. Interpret the coefficient on the interaction term. describe what happens to the standard error of the main education effect and why. Would you recommend keeping this interaction term in the equation? Why or why not?

d) Now drop the female X education interaction, but add another interaction, between female and married. What is the effect of being married for men? Now report the coefficient and standard error of the marriage effect for women. Is it statistically different from zero? (hint: for the standard error of a linear combination of estimates, use “lincom”):

e) Manually find out the adjusted R-squared for the regression in (d). Note: take advantage of the Stata output. Type “help regress” and scroll to the bottom. There you will see that the model sum of squares (i.e. the Sum of Squares describeed SSE) can be referenced as e(mss).

However, you can only access these results right after the regression has been run and before performing any other calculations. So, run the regression in (e) again, though you can do so without printing the results to the screen using the syntax “quietly: regress y x”. Confirm that your R-squared is the same as the one produced by Stata.

f) Building on the regression in (d), add the occupation variables: profocc, clerocc, servocc. What happens to the estimated rate of return to education? Why does this happen? If our goal is to correctly identify the causal effect of education, would you recommend including or excluding these occupation variables? describe why.

g) Manually find out the adjusted R-squared for the model you just ran? Compare with the result in (e). From an adjusted R-squared perspective, did the extra variables (profocc, clerocc, servocc) add much explanatory power to the model?

2. The dataset KIELMC.dta has information about houses sold in 1978 and 1981 in a Massachusetts town. In 1981 an incinerator was built.

a) Regress the log of the house’s sale price against the log of distance from the incinerator for houses sold in 1978 only. Run the same regression for houses sold in 1981 only. (Hint: use the clause “if year==1978” to select just that year for the regression). Does the result for 1978 make sense, given that the incinerator wasn’t built yet? What could describe this result?

b) Add the following variables to the regression: log of square footage of lot (lland), log of square footage of house (larea), log of distance to interstate (linst), age of house, squared age of house, number of rooms, number of bathrooms. Run the regression again for 1978, and again for 1981. What are the estimated effects of distance from the incinerator in 1978 and 1981 now? Are they significant and do they make sense?

describe why these results are so different from the ones in a.

c) For the regression from part b), perform a Chow Test to determine whether the 1978 and the 1981 data have the same parameters. Given the results from b) what do you expect the outcome of this test to be? (Hint: quietly run a pooled regression, a 1978 regression, and a 1981 regression, saving the SSR each time. Remember that the sum of squared residuals (aka residual sum of squares) can be accessed after the regression by typing “scalar ssr = e(rss)”).

d) Again using the regression from b), for the data, at what age does a house reach its maximum or minimum value? Which is it, a max or a min, and how do you know? Does that make sense? Are there any houses older than this in the data?

e) Rerun the 1981 equation but including the squared log of the distance to the interstate. What happens to the coefficient on distance to the incinerator? What does this tell you about the importance of functional form?

3) This exercise uses the dataset GPA1.dta.

a) Run a regression of colGPA against all of the following: hsGPA, ACT, PC, skipped, alcohol, greek, bgfriend

b) Now run the “restricted” regression that you need to construct an F-test of the joint hypothesis that the three “social” variables (alcohol, greek, and bgfriend) do not matter. Construct that F-statistic. Are these social variables jointly significant at alpha=1%?

describe how you know.

c) Confirm that you can get a similar result using Stata’s test command, which performs a Wald test, which is very similar to the F-test you just ran. The syntax is test varlist.

d) Now run a Linear Probability Model where bgfriend is the dependent variable and alcohol, greek, and colGPA are the independent variables. What is the interpretation of the coefficient on on alcohol?

e) A critique of the LPM is that the predicated values might value outside the 0-1 range. (probabilities can only range from 0 to 1). find out the predict values from (d). What percent of the predicted values are outside the 0-1 range? (Hint: an easy way to do this is to generate an 0/1 variable where 1 indicates that yhat was out of the 0-1 range. Then simply take the mean of the 0/1 variable).

f) We know that the Linear Probability Model suffers from heteroskedasticity. Test for heteroskedasticity using the special case of the White Test. Do you reject the null hypothesis of homoscedasticity at the 5% level, at the 10% level? (Hint: use the version of the F-stata for testing the overall significance of a regression).

g) Re-run the LPM but this time telling Stata to find out robust standard errors, i.e. specifying the vce(robust) option when running the regression. How do these standard errors compare to those in (d)? How about the coefficient estimates?

Statistics and Probability, Statistics

  • Category:- Statistics and Probability
  • Reference No.:- M93542

Have any Question? 


Related Questions in Statistics and Probability

How do you interpret the p-values in a regression output

How do you interpret the p-values in a regression output? What does a p-value of .0495 mean? What significance level is this?

Thirty percent of the time a sale at food shoppe is paid

Thirty percent of the time, a sale at Food Shoppe is paid using a store-issued credit card. A sample of 18 Food Shoppe sales is obtained. Let X represent the number of sales paid for using the store-issued credit card. W ...

All the customers who entered a store on a particular day

All the customers who entered a store on a particular day were given a surgery to fill out concerning their opinions of the service at the store? What type of sample is this? I can't decide between voluntary response or ...

You are at a magic show the magician has a coin and you as

You are at a magic show. The magician has a coin and you, as a member of the audience, do not know whether the coin has heads on both sides or heads on one side and tails on the other. The null hypothesis is that the coi ...

Jolie takes 45 minutes to do her statistics homework if the

Jolie takes 45 minutes to do her statistics homework. If the mean is 38 minutes and the standard deviation is 3, calculate Jolie's z score. Once calculated, interpret your findings in terms of Jolie's performance.

1 use your own random mu sigma to generate four sets of

1) Use your own random (μ, σ) to generate four sets of (normal-distribution based) random numbers (i.e., samples) of sizes n = 5, 20, 80, and 320, respectively. 2) Calculate the means and standard deviations for the 4 sa ...

Emily marc and thomas meet at a party to which novelists

Emily, Marc, and Thomas meet at a party to which novelists and poets have been invited. Every attendee at the party is either a novelist or a poet (but not both). Every poet knows all the other poets, but every novelist ...

Manifest destiny was a powerful force in nineteenth century

"Manifest Destiny was a powerful force in nineteenth century America not only calling for the expansion of the nation physically but also for spreading its ideals to more parts of the world. In what ways was slavery both ...

Suppose that fara is preferred by every man to all the

Suppose that Fara is preferred by every man to all the other women. Prove that under every stable matching Fara is matched to the same man. Who is the lucky guy?

Assignment quantitative methodsquestion 1 a large shipping

ASSIGNMENT: QUANTITATIVE METHODS QUESTION 1: A large shipping company recorded the tonnage shipped weekly across the pacific for 50 weeks. The data is presented in the table below. 530 492 462 379 487 523 600 618 548 431 ...

  • 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