1. Do you prefer the regression in (5) to the regression in (3)? Explain.

3:

Call: Im(formula = In(ahe) ~ In(age) + female + bachelor, data = df) Residuals : Min 10 Median 30 Max -2. 59410 -0.28720 0.01002 0.30250 2.06247 Coefficients: Estimate Std. Error + value Pr(>Itl) (Intercept) 0.32325 0. 19608 1. 649 0. 0993 In(age) 0. 71537 0. 05784 12.368 timeResiduals: Min 10 Median 30 Max -2.57645 -0.28683 0.01264 0.30410 2.05961 Coefficients: Estimate Std. Error + value Pr(>Itl) (Intercept) 0.4187449 0.6720879 0.623 0.53327 age 0 . 1341152 0.0457906 2.929 0.00341 *# I(age 2) -0. 0018603 0. 0907742 -2.403 0.01630 female -0. 1773644 0.0116256 -15.256