1. (a). Estimate the following regression model, and report the estimated coefficients and the associated standard errors. (1 point)

bweighti = 1 + 2smoke2i + 3smoke3i + 4magei + ei (1) (b). Interpret the estimated coefficients of smoke2 and smoke3. (3 points)

(c). Based on the model (1), conduct a hypothesis test to examine whether smoke has any impact on the infant birthweight at all? (3 points)

(d). Derive the elasticity of birthweight with respect to mother's age for the model (1). (3 points)

2. (a). Now consider a similar model but with log of birthweight as dependent variable. Estimate this model, and report the estimated coefficients and the associated standard errors. (1 point)

log(bweighti) = 1 + 2smoke2i + 3smoke3i + 4magei + ei (2)

(b). Calculate and interpret the percentage differences in birthweight by comparing groups smoke2 and smoke3 with the reference group. (3 points)

(c). Based on the model (2), conduct a hypothesis test to examine whether smoke has any impact on the infant birthweight at all? (3 points)

(d). Derive the elasticity of birthweight with respect to mother's age for the model (2). (3 points)