a. Write the results from specification (1) that are presented in figure (2) in the format of a fitted line (round the decimals places up to 2). b. After adding variable abil to the model (Figure 3), what happened to the standard error of the coefficient of educ? Discuss. c. Are the coefficients of fatheduc and motheduc individually significant at 5% level? d.Will you keep the two variables that control for parental education in the model? Explain your answer.
a. Write the results from specification (1) that are presented in figure (2) in the format of a fitted line (round the decimals places up to 2). b. After adding variable abil to the model (Figure 3), what happened to the standard error of the coefficient of educ? Discuss. c. Are the coefficients of fatheduc and motheduc individually significant at 5% level? d.Will you keep the two variables that control for parental education in the model? Explain your answer.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
1
![2.Use the Stata outputs presented in handout (1) to answer the following
questions.
a. Write the results from specification (1) that are presented in figure (2) in
the format of a fitted line (round the decimals places up to 2).
b. After adding variable abil to the model (Figure 3), what happened to the
standard error of the coefficient of educ? Discuss.
c. Are the coefficients of fatheduc and motheduc individually significant at
5% level?
d.Will you keep the two variables that control for parental education in the model? Explain
your answer.
re (1) – variable descriptions
VAR NAME
DESCRIPTION
WAGE
hourly wage
ABIL
a score to measure abilily
completed years of education for the
respondent
mother's completed years of education
EDUC
МОTHEDUC
FATHEDUC
father's completed years of education
Figure (2) – Stata output for specification 1
• reg wage educ exper
Source
df
MS
Number of obs
1,230
111.44
F(2, 1227)
Model
15582.8718
2
7791.4359
Prob > F
e.0000
Residual
R-squared
Adj R-squared
85787.2083
1,227
69.9162252
0.1537
0.1523
Total
101370.08
1,229 82.4817576
Root MSE
8.3616
wage
Coef.
Std. Err.
P>|t|
[95% Conf. Interval]
educ
1.94783
.1389974
14.01
0.000
1.675131
2.220529
exper
.6142872
.1051414
5.84
0.000
.4080103
.8205641
_cons
-18.70484
2.723747
-6.87
0.000
- 24.04856
-13.36112](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5092d283-37fd-4762-962c-92db43347004%2Fd367cea8-5638-489c-9107-fab397dd8cfa%2Fap3njec_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2.Use the Stata outputs presented in handout (1) to answer the following
questions.
a. Write the results from specification (1) that are presented in figure (2) in
the format of a fitted line (round the decimals places up to 2).
b. After adding variable abil to the model (Figure 3), what happened to the
standard error of the coefficient of educ? Discuss.
c. Are the coefficients of fatheduc and motheduc individually significant at
5% level?
d.Will you keep the two variables that control for parental education in the model? Explain
your answer.
re (1) – variable descriptions
VAR NAME
DESCRIPTION
WAGE
hourly wage
ABIL
a score to measure abilily
completed years of education for the
respondent
mother's completed years of education
EDUC
МОTHEDUC
FATHEDUC
father's completed years of education
Figure (2) – Stata output for specification 1
• reg wage educ exper
Source
df
MS
Number of obs
1,230
111.44
F(2, 1227)
Model
15582.8718
2
7791.4359
Prob > F
e.0000
Residual
R-squared
Adj R-squared
85787.2083
1,227
69.9162252
0.1537
0.1523
Total
101370.08
1,229 82.4817576
Root MSE
8.3616
wage
Coef.
Std. Err.
P>|t|
[95% Conf. Interval]
educ
1.94783
.1389974
14.01
0.000
1.675131
2.220529
exper
.6142872
.1051414
5.84
0.000
.4080103
.8205641
_cons
-18.70484
2.723747
-6.87
0.000
- 24.04856
-13.36112
![Figure (3) – Stata output for specification 2
• reg wage educ exper abil
Source
df
MS
Number of obs
1,230
F(3, 1226)
79.35
3 5494.14037
1,226 69.2395261
Model
16482.4211
Prob > F
0.0000
Residual
84887.659
R-squared
Adj R-squared
0.1626
0.1605
Total
101370.08
1,229 82.4817576
Root MSE
8.321
wage
Coef.
Std. Err.
t
P>|t|
[95% Conf. Interval]
educ
1.701564
.1542768
11.03
0.000
1.398889
2.00424
.6393264
.1048617
6.10
0.000
.4335981
.8450547
exper
abil
.4879376
.135372
3.60
0.000
.2223512
.753524
_cons
-16.63977
2.770423
-6.01
0.000
-22.07506
-11.20447
Figure (4) – Stata output for specification 2
reg wage educ exper abil fatheduc motheduc
Source
df
MS
Number of obs
1,230
F(5, 1224)
Prob > F
48.98
5 3380.07315
Model
Residual
16900.3658
e.0000
84469.7143
R-squared
Adj R-squared
Root MSE
1,224 69.0112045
0.1667
%3D
%3D
0.1633
Total
101370.08
1,229 82.4817576
8.3073
Coef.
Std. Err.
P>|t|
[95% Conf. Interval]
wage
t
educ
1.626432
.158765
10.24
e.000
1.314951
1.937914
.6577769
.1050186
6.26
e.000
.4517405
.8638132
exper
abil
.4283876
.1374382
3.12
0.002
.158747
.6980281
fatheduc
.2366884
.1306607
1.81
0.070
-.0196555
.4930322
motheduc
.0964206
.1304291
0.74
0.460
-.1594688
.35231
_cons
-19.47246
3.00298
-6.48
0.000
-25.36401
-13.5809](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5092d283-37fd-4762-962c-92db43347004%2Fd367cea8-5638-489c-9107-fab397dd8cfa%2Fv2hgyq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Figure (3) – Stata output for specification 2
• reg wage educ exper abil
Source
df
MS
Number of obs
1,230
F(3, 1226)
79.35
3 5494.14037
1,226 69.2395261
Model
16482.4211
Prob > F
0.0000
Residual
84887.659
R-squared
Adj R-squared
0.1626
0.1605
Total
101370.08
1,229 82.4817576
Root MSE
8.321
wage
Coef.
Std. Err.
t
P>|t|
[95% Conf. Interval]
educ
1.701564
.1542768
11.03
0.000
1.398889
2.00424
.6393264
.1048617
6.10
0.000
.4335981
.8450547
exper
abil
.4879376
.135372
3.60
0.000
.2223512
.753524
_cons
-16.63977
2.770423
-6.01
0.000
-22.07506
-11.20447
Figure (4) – Stata output for specification 2
reg wage educ exper abil fatheduc motheduc
Source
df
MS
Number of obs
1,230
F(5, 1224)
Prob > F
48.98
5 3380.07315
Model
Residual
16900.3658
e.0000
84469.7143
R-squared
Adj R-squared
Root MSE
1,224 69.0112045
0.1667
%3D
%3D
0.1633
Total
101370.08
1,229 82.4817576
8.3073
Coef.
Std. Err.
P>|t|
[95% Conf. Interval]
wage
t
educ
1.626432
.158765
10.24
e.000
1.314951
1.937914
.6577769
.1050186
6.26
e.000
.4517405
.8638132
exper
abil
.4283876
.1374382
3.12
0.002
.158747
.6980281
fatheduc
.2366884
.1306607
1.81
0.070
-.0196555
.4930322
motheduc
.0964206
.1304291
0.74
0.460
-.1594688
.35231
_cons
-19.47246
3.00298
-6.48
0.000
-25.36401
-13.5809
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