A researcher is using a panel data set on n = 1000 workers over T = 10years (from 2001 through 2010) that contains the workers’ earnings, gender,education, and age. The researcher is interested in the effect of educationon earnings. Give some examples of unobserved person-specific variablesthat are correlated with both education and earnings. Can you think ofexamples of time-specific variables that might be correlated with educationand earnings? How would you control for these person-specific and time-specific effects in a panel data regression?
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
A researcher is using a panel data set on n = 1000 workers over T = 10
years (from 2001 through 2010) that contains the workers’ earnings, gender,
education, and age. The researcher is interested in the effect of education
on earnings. Give some examples of unobserved person-specific variables
that are
examples of time-specific variables that might be correlated with education
and earnings? How would you control for these person-specific and time-specific effects in a panel data regression?
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
