2. (40 points) In their 1999 Applied Economics Letters paper, Zakir and Wunnava proposed the following specification in identifying the factors affecting infant mortality rates (IMR): IMR₁ = B₁+ B₁FERTILITY, + ß₂LNGNP; +߸LABOUR; + ßLABOUR² + B₂LITERACY, + BHEALTH; +ε₁ Where i=1,2,..., 117 (i.e., based on a cross-section of 117 countries) IMR = infant mortality rate-number of deaths before age 1 per 1000 live births FERTILITY = number of births per woman LNGNP = the natural logarithm of per capita GNP (note that GNP is measured in '000 of $s) LABOUR = percentage of women in the labor force LITERACY = female literacy rate HEALTH = expenditure on health care as percentage of GNP Following are their estimated regression results along with sample means (based on a cross-section of industrialized and third world countries for 1993). Mean of IMR: 44.983 Variable name Estimated t-ratio Mean coefficient FERTILITY 10.812 7.848 3.5556 LNGNP -6.998 -3.134 8.2585 LABOUR 4.135 3.359 40.051 LABOUR² -0.046 -2.847 1661.5 LITERACY -0.487 -6.707 74.339 HEALTH -0.282 -0.370 1.9113 CONSTANT 10.35 0.3022 (a) Would agree with the signs of their estimated coefficients of "FERTILITY”, and ‘LITERACY' variables? From the given information, would you conclude that they have a statistically significant regression model? Explain. (b) Explain clearly the logic behind the usage of LNGNP instead of GNP [also pay attention to the sign of the estimated coefficient of this variable]. Be rigorous. (c) Why do you think that the authors included both LABOUR and LABOUR² in their specification? Explain clearly your position keeping in mind the signs of their estimated coefficients. Please answer on the back of this page. 2
2. (40 points) In their 1999 Applied Economics Letters paper, Zakir and Wunnava proposed the following specification in identifying the factors affecting infant mortality rates (IMR): IMR₁ = B₁+ B₁FERTILITY, + ß₂LNGNP; +߸LABOUR; + ßLABOUR² + B₂LITERACY, + BHEALTH; +ε₁ Where i=1,2,..., 117 (i.e., based on a cross-section of 117 countries) IMR = infant mortality rate-number of deaths before age 1 per 1000 live births FERTILITY = number of births per woman LNGNP = the natural logarithm of per capita GNP (note that GNP is measured in '000 of $s) LABOUR = percentage of women in the labor force LITERACY = female literacy rate HEALTH = expenditure on health care as percentage of GNP Following are their estimated regression results along with sample means (based on a cross-section of industrialized and third world countries for 1993). Mean of IMR: 44.983 Variable name Estimated t-ratio Mean coefficient FERTILITY 10.812 7.848 3.5556 LNGNP -6.998 -3.134 8.2585 LABOUR 4.135 3.359 40.051 LABOUR² -0.046 -2.847 1661.5 LITERACY -0.487 -6.707 74.339 HEALTH -0.282 -0.370 1.9113 CONSTANT 10.35 0.3022 (a) Would agree with the signs of their estimated coefficients of "FERTILITY”, and ‘LITERACY' variables? From the given information, would you conclude that they have a statistically significant regression model? Explain. (b) Explain clearly the logic behind the usage of LNGNP instead of GNP [also pay attention to the sign of the estimated coefficient of this variable]. Be rigorous. (c) Why do you think that the authors included both LABOUR and LABOUR² in their specification? Explain clearly your position keeping in mind the signs of their estimated coefficients. Please answer on the back of this page. 2
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![2. (40 points)
In their 1999 Applied Economics Letters paper, Zakir and Wunnava proposed the following
specification in identifying the factors affecting infant mortality rates (IMR):
IMR₁ = B₁+ B₁FERTILITY, + ß₂LNGNP; +߸LABOUR; + ßLABOUR² + B₂LITERACY, +
BHEALTH; +ε₁
Where i=1,2,..., 117 (i.e., based on a cross-section of 117 countries)
IMR = infant mortality rate-number of deaths before age 1 per 1000 live births
FERTILITY = number of births per woman
LNGNP = the natural logarithm of per capita GNP (note that GNP is measured in '000 of $s)
LABOUR = percentage of women in the labor force
LITERACY = female literacy rate
HEALTH = expenditure on health care as percentage of GNP
Following are their estimated regression results along with sample means (based on a cross-section
of industrialized and third world countries for 1993).
Mean of IMR: 44.983
Variable
name
Estimated
t-ratio
Mean
coefficient
FERTILITY
10.812
7.848
3.5556
LNGNP
-6.998
-3.134
8.2585
LABOUR
4.135
3.359
40.051
LABOUR²
-0.046
-2.847
1661.5
LITERACY
-0.487
-6.707
74.339
HEALTH
-0.282
-0.370
1.9113
CONSTANT
10.35
0.3022
(a) Would agree with the signs of their estimated coefficients of "FERTILITY”, and ‘LITERACY' variables? From
the given information, would you conclude that they have a statistically significant regression model? Explain.
(b) Explain clearly the logic behind the usage of LNGNP instead of GNP [also pay attention to the sign of the estimated
coefficient of this variable]. Be rigorous.
(c) Why do you think that the authors included both LABOUR and LABOUR² in their specification? Explain clearly
your position keeping in mind the signs of their estimated coefficients. Please answer on the back of this page.
2](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F51b796eb-4747-402e-b532-f7f11eba36d4%2Fd85c92f9-ded7-4893-a48d-680b866b616c%2Fakh821_processed.png&w=3840&q=75)
Transcribed Image Text:2. (40 points)
In their 1999 Applied Economics Letters paper, Zakir and Wunnava proposed the following
specification in identifying the factors affecting infant mortality rates (IMR):
IMR₁ = B₁+ B₁FERTILITY, + ß₂LNGNP; +߸LABOUR; + ßLABOUR² + B₂LITERACY, +
BHEALTH; +ε₁
Where i=1,2,..., 117 (i.e., based on a cross-section of 117 countries)
IMR = infant mortality rate-number of deaths before age 1 per 1000 live births
FERTILITY = number of births per woman
LNGNP = the natural logarithm of per capita GNP (note that GNP is measured in '000 of $s)
LABOUR = percentage of women in the labor force
LITERACY = female literacy rate
HEALTH = expenditure on health care as percentage of GNP
Following are their estimated regression results along with sample means (based on a cross-section
of industrialized and third world countries for 1993).
Mean of IMR: 44.983
Variable
name
Estimated
t-ratio
Mean
coefficient
FERTILITY
10.812
7.848
3.5556
LNGNP
-6.998
-3.134
8.2585
LABOUR
4.135
3.359
40.051
LABOUR²
-0.046
-2.847
1661.5
LITERACY
-0.487
-6.707
74.339
HEALTH
-0.282
-0.370
1.9113
CONSTANT
10.35
0.3022
(a) Would agree with the signs of their estimated coefficients of "FERTILITY”, and ‘LITERACY' variables? From
the given information, would you conclude that they have a statistically significant regression model? Explain.
(b) Explain clearly the logic behind the usage of LNGNP instead of GNP [also pay attention to the sign of the estimated
coefficient of this variable]. Be rigorous.
(c) Why do you think that the authors included both LABOUR and LABOUR² in their specification? Explain clearly
your position keeping in mind the signs of their estimated coefficients. Please answer on the back of this page.
2
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