Consider the following 2-stage least squares regression output: . ivregress 2sls jail c.age##c.age i.urban (compulsory = quarter1 quarter2 quarter3) Instrumental variables (2SLS) regression Number of obs 4,290 Wald chi2(4) 745.85 Prob > chi2 0.0000 R-squared 0.0982 Root MSE .46907 jail | Coef. Std. Err. P>]z]| [95% Conf. Interval] compulsory | -.4994462 .2083769 -2.40 0.017 -.9078573 -.091035 age | .1411681 .0061719 22.87 0.000 .1290714 .1532649 c.age#c.age | -.0021276 .0000906 -23.49 0.000 -.0023052 -.0019501 1.urban | .0471129 .0300781 1.57 0.117 -.0118391 1060649 „cons | -1.202564 .1196858 -10.05 0.000 -1.437144 -.9679844 Instrumented: compulsory Instruments: age c.age#c.age 1.urban quarter1 quarter2 quarter3 In order to generate this output you need to 1) obtain the predicted value of compulsory form a regression of compulsory on a constant, quarter1, quarter2, and quarter3; 2) perform an IV regression of jail on a constant, age, age?, urban and compulsory using the predicted value of compulsory from the previous step as an instrument for compulsory O True O False

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
icon
Related questions
Question
QUESTION 5
Consider the following 2-stage least squares regression output:
ivregress 2sls jail c.age##c.age i.urban (compulsory = quarter1 quarter2 quarter3)
Instrumental variables (2SLS) regression
Number of obs
4,290
Wald chi2(4)
745.85
Prob > chi2
0.0000
R-squared
0.0982
Root MSE
.46907
jail |
Coef.
Std. Err.
P>]z|
[95% Conf. Interval]
compulsory |
age |
-.4994462
.2083769
-2.40
0.017
-.9078573
-.091035
.1411681
.0061719
22.87
0.000
.1290714
.1532649
c.age#c.age |
-.0021276
.0000906
-23.49
0.000
-.0023052
-.0019501
1. urban |
.0471129
.0300781
1.57
0.117
-.0118391
.1060649
„cons |
-1.202564
.1196858
-10.05
0.000
-1.437144
-.9679844
Instrumented: compulsory
Instruments:
age c.age#c.age 1.urban quarter1 quarter2 quarter3
In order to generate this output you need to 1) obtain the predicted value of compulsory form
a regression of compulsory on a constant, quarter1, quarter2, and quarter3; 2) perform an IV
regression of jail on a constant, age, age?, urban and compulsory using the predicted value of
compulsory from the previous step as an instrument for compulsory
O True
False
Transcribed Image Text:QUESTION 5 Consider the following 2-stage least squares regression output: ivregress 2sls jail c.age##c.age i.urban (compulsory = quarter1 quarter2 quarter3) Instrumental variables (2SLS) regression Number of obs 4,290 Wald chi2(4) 745.85 Prob > chi2 0.0000 R-squared 0.0982 Root MSE .46907 jail | Coef. Std. Err. P>]z| [95% Conf. Interval] compulsory | age | -.4994462 .2083769 -2.40 0.017 -.9078573 -.091035 .1411681 .0061719 22.87 0.000 .1290714 .1532649 c.age#c.age | -.0021276 .0000906 -23.49 0.000 -.0023052 -.0019501 1. urban | .0471129 .0300781 1.57 0.117 -.0118391 .1060649 „cons | -1.202564 .1196858 -10.05 0.000 -1.437144 -.9679844 Instrumented: compulsory Instruments: age c.age#c.age 1.urban quarter1 quarter2 quarter3 In order to generate this output you need to 1) obtain the predicted value of compulsory form a regression of compulsory on a constant, quarter1, quarter2, and quarter3; 2) perform an IV regression of jail on a constant, age, age?, urban and compulsory using the predicted value of compulsory from the previous step as an instrument for compulsory O True False
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
Recommended textbooks for you
MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman