Answered step by step
Verified Expert Solution
Question
1 Approved Answer
6. (Empirical) Use Card's data set. Estimate the model covered in class by OLS and 2SLS but replace education by the following dummy D{0,1} where
6. (Empirical) Use Card's data set. Estimate the model covered in class by OLS and 2SLS but replace education by the following dummy D{0,1} where D=1 if education >12. (You need the following packages for this question: ivreg, sandwich, Imtest, nIWaldTest.) i) What are the estimates of the coefficient of D by OLS and 2SLS? What are their robust standard errors? Are they significant at 5% level? ii) For 2SLS, test the the joint hypothesis H0:education=0 and experience+12experience2=0 by command "nIWaldtest". You need to obtain the robust covariance matrix first by vcovHC. 6. (Empirical) Use Card's data set. Estimate the model covered in class by OLS and 2SLS but replace education by the following dummy D{0,1} where D=1 if education >12. (You need the following packages for this question: ivreg, sandwich, Imtest, nIWaldTest.) i) What are the estimates of the coefficient of D by OLS and 2SLS? What are their robust standard errors? Are they significant at 5% level? ii) For 2SLS, test the the joint hypothesis H0:education=0 and experience+12experience2=0 by command "nIWaldtest". You need to obtain the robust covariance matrix first by vcovHC
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started