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A: The Wage Equation in a Cross-Sectional Setting (36 Marks) A member of your team has run a number of models using the sample of
A: The Wage Equation in a Cross-Sectional Setting (36 Marks) A member of your team has run a number of models using the sample of 716 individuals for the year 1988 and produced the results in Table 1 and additional output presented below. (a) Does it seem reasonable to model wage and exper as a log-linear relationship? Produce two scatter plots and compare the linear and log-linear cases and comment on the choice. (6 marks) (b) Does it seem reasonable to model wage and tenure as a log-linear relationship? Produce two scatter plots and compare the linear and log-linear cases and comment on the choice. (6 marks) (c) Using all the evidence provided, do you find empirical support of a wage gap based on the geographical location of the worker? (6 marks
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