QUESTION 1 Consider a regression model of workers' wages using vector-matrix notation and education data. Data are provided in the table below: Constant 1 1 1 Wage 1.82 2.14 1.56 Person Education 1 13 2 15 3 10 a) Using the information in the table above, discuss whether there is linear independence in the above model b) Compute the coefficient vector of this model c) The researcher transformed the wage variable into natural log values using Stata and the education values were considered in terms of years. How could you interpret the coefficient on education? d) Use the estimated coefficient vector to compute the total sum of squared error ε'ε. e) Compute the R² and explain how well education explains the variation in wages. f) Briefly comment on the reliability of the above result.
QUESTION 1 Consider a regression model of workers' wages using vector-matrix notation and education data. Data are provided in the table below: Constant 1 1 1 Wage 1.82 2.14 1.56 Person Education 1 13 2 15 3 10 a) Using the information in the table above, discuss whether there is linear independence in the above model b) Compute the coefficient vector of this model c) The researcher transformed the wage variable into natural log values using Stata and the education values were considered in terms of years. How could you interpret the coefficient on education? d) Use the estimated coefficient vector to compute the total sum of squared error ε'ε. e) Compute the R² and explain how well education explains the variation in wages. f) Briefly comment on the reliability of the above result.
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Transcribed Image Text:QUESTION 1
Consider a regression model of workers' wages using vector-matrix notation and
education data. Data are provided in the table below:
Constant
1
1
Person
Education
1
13
2
15
3
10
a) Using the information in the table above, discuss whether there is linear
independence in the above model
b) Compute the coefficient vector of this model
c) The researcher transformed the wage variable into natural log values using Stata
and the education values were considered in terms of years. How could you
interpret the coefficient on education?
d) Use the estimated coefficient vector to compute the total sum of squared error
εε.
Wage
1.82
2.14
1.56
e) Compute the R² and explain how well education explains the variation in wages.
f) Briefly comment on the reliability of the above result.
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