logWage = B1+ B2 educ + €, where . 1. logWage means the log of yearly wage measured in dollars. 2. educ means years of education (schooling) The regression output is given below: . reg logwage educ Source | SS df MS Number of obs = 100 F(2, 97) = 97.20 Model | 0.250000 1 .246632 Prob > F = 0.0000 Residual | 0.250000 98 .002537 R-squared = 0.5000 Adj R-squared = 0.4900 Total | 20000.00 99 200.00 Root MSE = 0.0503 logwage | Coef. Std. Err. t P>|t| [95% Conf. Interval] educ _cons | 0.40000 5.00000 0.200000 0.100000 2.00 0.050 10.00 0.000 0.0000000 0.800000 4.8000000 5.200000
* Practice set - dont understand *
- What is the expected value of the Log of Wage for a person with 10 years of education?
(a) 9
(b) 15
(c) 5
(d) 13
(e) 25
- The interpretation of the estimate ˆb2 is that, on average
(a) 1% increase in education leads to a 40% increase in wage.
(b) 1 additional year of education leads to a 40% increase in wage.
(c) 1 additional years of education leads to an increase of $40 in wage
(d) 1% increase in education leads to an increase of $40 in wage
(e) 1% increase in education leads to 0.4% increase in wage
-Let the estimate for the expected value of wage at 10 years of education be 10,000. What is the expected value of the marginal effect of an additional year of education for a person with 10 years of education?
(a) 1,000
(b) 10,000
(c) 2,000
(d) 4,000
(e) 8,000
Let the estimate for the expected value of wage at 10 years of education be 10,000. What is the expected value of the elasticity of education on wages for a person with 10 years of education?
(a) 4
(b) 10
(c) 8
(d) 5
(e) 1
-The estimated confidence interval for β2 at 95% confidence level is [0.00, 0.80]. Based on this estimate, which of the following statements is FALSE:
(a) We can reject the hypothesis H0 : β2 = 1 versus H0 : β2 ̸= 1 at 5% significant level.
(b) The p-value for the hypothesis testing of H0 : β2 = 0.80 versus H0 : β2 ̸= 0.80 is 5%.
(c) The estimate for β2 is the center of the interval.
(d) We cannot reject the hypothesis H0 : β2 = 0.1 versus H0 : β2 ̸= 0.1 at 5% significant level.
(e) The true parameter β2 lies in the interval [0.00, 0.80] with probability 95%.
- The regression estimate for β2 are ˆb2 = 0.4 and sˆe(b2) = 0.2, and let the estimate for the expected value of wage at 10 years of education be 10000. What is the 95% confidence interval for the elasticity of schooling on wage for a person with 10 years of education? (use critical value tc = 2)
(a) [0.00,8.00]
(b) [3.60,4.40]
(c) [0.00,0.80]
(d) [2.00,6.00]
(e) [3.20,4.80]
![logWage = B1+ B2 educ + €, where
.
1. logWage means the log of yearly wage measured in dollars.
2. educ means years of education (schooling)
The regression output is given below:
.
reg logwage educ
Source |
SS
df
MS
Number of obs
=
100
F(2, 97)
=
97.20
Model | 0.250000
1
.246632
Prob > F
=
0.0000
Residual |
0.250000
98
.002537
R-squared
=
0.5000
Adj R-squared
=
0.4900
Total |
20000.00
99
200.00
Root MSE
=
0.0503
logwage |
Coef.
Std. Err.
t
P>|t|
[95% Conf. Interval]
educ
_cons |
0.40000
5.00000
0.200000
0.100000
2.00
0.050
10.00 0.000
0.0000000
0.800000
4.8000000
5.200000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6035f1a2-2c03-490a-9469-88f7b64e730f%2Fa25a58bb-e9a5-42ff-9b01-9fec71020bdb%2Fm7xpf62_processed.png&w=3840&q=75)
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