2. You have obtained a sample of 14,925 individuals from the Current Population Survey (CPS) and are interested in the relationship between average hourly earnings and years of education. The regression yields the following result: ahe -4.58 + 1.71 * educ R² = 0.182 where abe and educ are measured in dollars and years respectively. a. Interpret the coefficients and the regression R-squared value. b. Do the results suggest that there is a guarantee for average hourly earnings to rise for everyone as they receive an additional year of education? Explain.

2. You have obtained a sample of 14,925 individuals from the Current Population Survey (CPS) and are interested in the relationship between average hourly earnings and years of education. The regression yields the following result: ahe -4.58 + 1.71 * educ R² = 0.182 where abe and educ are measured in dollars and years respectively. a. Interpret the coefficients and the regression R-squared value. b. Do the results suggest that there is a guarantee for average hourly earnings to rise for everyone as they receive an additional year of education? Explain.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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46) The following model is a simplified version of the multiple regression model used by Biddle and Hamermesh (1990) to study the trade-off between time spent sleeping and working and to look at other factors affecting sleep: sleep = Bo + B₁totwrk + ß₂educ + ß3age +u, where sleep and totwrk (total work) are measured in minutes per week and educ and age are measured in years. (i) If adults trade off sleep for work, what is the sign of f₁? (ii) What signs do you think ₂ and 3 will have? (iii) Using the data in SLEEP75, the estimated equation is sleep = 6,241.15 + 0.211totwrk + 9.22educ + 1.67age n = 211, R² = 0.981 If someone works five more hours per week, by how many minutes is sleep predicted to fall? Is this a large tradeoff? (iv) Discuss the sign and magnitude of the estimated coefficient on educ. (v) Would you say totwrk, educ, and age explain much of the variation in sleep? What other factors might affect the time spent sleeping? Are these likely to be correlated with totwrk?
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