9. You want to estimate the effect of a city's having high-speed rail on their GDP per capita, and you want to look at the change in percent terms. High-speed rail is represented by a dummy variable equal to 1 if the city has high-speed rail and 0 if they don't. What should you do with your regression? (A) Log the high-speed rail variable. (B) Log the GDP per capita variable. (C) Log both the higlh-speed rail variable and the GDP per capita variable. (D) Include a quadratic term on the RHS of the regression. (E) Include an interaction term on the RHS of the regression. 10. You have data for a group of urban neighborhoods, and you want to estimate the effect of the average age in the neighborhood on violent crime in that neighborhood. The regression equation with coefficients filled in is as follows: CrimeRate, = 5 - 2.5Age; + 1.5Age? + .5Age; x Low-Income, + Yi Low-Income, is a variable equal to 1 if the neighborhood is low-income and 0 if it's not. If the average age rises by 1, how much is the crime rate predicted to change in a low-income neighborhood? (A) -2.5 (B) 1.54ge; -2.5 (С) 34ge, - 2 (D) 34ge; – 2.5 (E) 3.54ge; – 2.5 11. You have panel data on employment characteristics for a group of Americans aged 35-65. You want to estimate the effect of union membership on wages using individual-fixed effects and time-fixed effęcts. Which of the following factors do you still need to control for separately? (A) The years of education each individual has completed. (B) The level of social skills each individual has. (C) The amount of job experience each individual has. (D) How well the U.S. economy is doing. 12. A fixed effects regression equation (A) Does not have an intercept. (B) Is used in a difference-in-differences setup. (C) Is always used with panel data. (D) (A), (B), and (C) are all true.
9. You want to estimate the effect of a city's having high-speed rail on their GDP per capita, and you want to look at the change in percent terms. High-speed rail is represented by a dummy variable equal to 1 if the city has high-speed rail and 0 if they don't. What should you do with your regression? (A) Log the high-speed rail variable. (B) Log the GDP per capita variable. (C) Log both the higlh-speed rail variable and the GDP per capita variable. (D) Include a quadratic term on the RHS of the regression. (E) Include an interaction term on the RHS of the regression. 10. You have data for a group of urban neighborhoods, and you want to estimate the effect of the average age in the neighborhood on violent crime in that neighborhood. The regression equation with coefficients filled in is as follows: CrimeRate, = 5 - 2.5Age; + 1.5Age? + .5Age; x Low-Income, + Yi Low-Income, is a variable equal to 1 if the neighborhood is low-income and 0 if it's not. If the average age rises by 1, how much is the crime rate predicted to change in a low-income neighborhood? (A) -2.5 (B) 1.54ge; -2.5 (С) 34ge, - 2 (D) 34ge; – 2.5 (E) 3.54ge; – 2.5 11. You have panel data on employment characteristics for a group of Americans aged 35-65. You want to estimate the effect of union membership on wages using individual-fixed effects and time-fixed effęcts. Which of the following factors do you still need to control for separately? (A) The years of education each individual has completed. (B) The level of social skills each individual has. (C) The amount of job experience each individual has. (D) How well the U.S. economy is doing. 12. A fixed effects regression equation (A) Does not have an intercept. (B) Is used in a difference-in-differences setup. (C) Is always used with panel data. (D) (A), (B), and (C) are all true.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:9. You want to estimate the effect of a city's having high-speed rail on their GDP per capita, and
you want to look at the change in percent terms. High-speed rail is represented by a dummy
variable equal to 1 if the city has high-speed rail and 0 if they don't. What should you do with
your regression?
(A) Log the high-speed rail variable.
(B) Log the GDP per capita variable.
(C) Log both the high-speed rail variable and the GDP per capita variable.
(D) Include a quadratic term on the RHS of the regression.
(E) Include an interaction term on the RHS of the regression.
10. You have data for a group of urban neighborhoods, and you want to estimate the effect of the
average age in the neighborhood on violent crime in that neighborhood. The regression equation
with coefficients filled in is as follows:
CrimeRates = 5 - 2.5Age; + 1.5Age? + .5Age; x Low-Incomes+ Ui
Low-Income, is a variable equal to 1 if the neighborhood is low-income and 0 if it's not. If the
average age rises by 1, how much is the crime rate predicted to change in a low-income
neighborhood?
(A) -2.5
(B) 1.5Age; -2.5
(C) 3Age; – 2
(D) 3Age; – 2.5
(E) 3.54ge; – 2.5
11. You have panel data on employment characteristics for a group of Americans aged 35-65.
You want to estimate the effect of union membership on wages using individual-fixed effects
and time-fixed effects. Which of the following factors do you still need to control for separately?
(A) The years of education each individual has completed.
(B) The level of social skills each individual has.
(C) The amount of job experience each individual has.
(D) How well the U.S. economy is doing.
12. A fixed effects regression equation
(A) Does not have an intercept.
(B) Is used in a difference-in-differences setup.
(C) Is always used with panel data.
(D) (A), (B), and (C) are all true.
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