Suppose you want to examine the effects of a training program on future earnings using the following model: earn984.64+2.376train +0.371 earn96 +0.366educ- 1.86 age + 2,534 married (1.14) (0.016) (0.062) (0.013) (0.4) where earn 98- 1998 earnings, in thousands of dollars train-1 if the individual participated in the training program, and -0 otherwise (0.43) earn 96- 1996 earnings, in thousands of dollars educ years of education age age, in years married-1 if the individual is married, and -0 otherwise Suppose that there is a high degree of correlation (but not perfect) between earnings in 1996, education, age, and marital status. True or False: We should be concerned about this high degree of correlation because it affects our ability to reliably estimate the impact of the training program on 1998 earnings, r. True False

Suppose you want to examine the effects of a training program on future earnings using the following model: earn984.64+2.376train +0.371 earn96 +0.366educ- 1.86 age + 2,534 married (1.14) (0.016) (0.062) (0.013) (0.4) where earn 98- 1998 earnings, in thousands of dollars train-1 if the individual participated in the training program, and -0 otherwise (0.43) earn 96- 1996 earnings, in thousands of dollars educ years of education age age, in years married-1 if the individual is married, and -0 otherwise Suppose that there is a high degree of correlation (but not perfect) between earnings in 1996, education, age, and marital status. True or False: We should be concerned about this high degree of correlation because it affects our ability to reliably estimate the impact of the training program on 1998 earnings, r. True False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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am. 115.
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D.28.