The median starting salary for new law school graduates is determined by log(salary) = Bo + B,LSAT + B;GPA + B,log(libvol) + Bilog(cost) + Bsrank + u, where LSAT is the median LSAT score for the graduating class, GPA is the median college GPA for the class, libvol is the number of volumes in the law school library, cost is the annual cost of attending law school, and rank is a law school ranking (with rank = 1 being the best). (1) Explain why we expect Bs < 0. (2) What signs do you expect for the other slope parameters? Justify your answers. (3) Using the data in LAWSCH85, the estimated equation is FAT 349 C DA (lik
The median starting salary for new law school graduates is determined by log(salary) = Bo + B,LSAT + B;GPA + B,log(libvol) + Bilog(cost) + Bsrank + u, where LSAT is the median LSAT score for the graduating class, GPA is the median college GPA for the class, libvol is the number of volumes in the law school library, cost is the annual cost of attending law school, and rank is a law school ranking (with rank = 1 being the best). (1) Explain why we expect Bs < 0. (2) What signs do you expect for the other slope parameters? Justify your answers. (3) Using the data in LAWSCH85, the estimated equation is FAT 349 C DA (lik
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:The median starting salary for new law school graduates is determined by
log(salary) = Bo + B,LSAT + B,GPA + Bzlog(libvol) + Balog(cost)
+ Bsrank + u,
where LSAT is the median LSAT score for the graduating class, GPA is the median college GPA for the
class, libvol is the number of volumes in the law school library, cost is the annual cost of attending law
school, and rank is a law school ranking (with rank = 1 being the best).
(1) Explain why we expect ß; < 0.
(2) What signs do you expect for the other slope parameters? Justify your answers.
(3) Using the data in LAWSCH85, the estimated equation is
log(salary) = 8.34 + .0047 LSAT + .248 GPA + .095 log(libvol)
+ .038 log(cost) - .0033 rank
n = 136, R? = .842.
What is the predicted ceteris paribus difference in salary for schools with a median GPA differ-
ent by one point? (Report your answer as a percentage.)
(4) Interpret the coefficient on the variable log(libvol).
(5) Would you say it is better to attend a higher ranked law school? How much is a difference in
ranking of 20 worth in terms of predicted starting salary?
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