(Hamermesh and Parker, 2005, Economics of Education Review) Install an R package "AER". Type "install.packages("AER")" in your R console. Then type "library(AER)" to use the package. The data set "TeachingRatings" can be now loaded using "data(TeachingRatings)". The data contains course evaluations, course characteristics, and professor charactoristics for 463 courses for the academic years 2000-2002 at the University of Texas at Austin. Carefully read the data description which can be found by typing "help(TeachingRatings)" or "?TeachingRatings".

a) Run a regression of course evaluation (eval) on instructor's beauty rating (beauty). Briefly explain the result.

b) You may omit important variables that can explain course evaluation. First, compute the correlation between beauty rating (beauty) and age (age). Suggest whether the effect of age on course evaluation is positive or negative. Given the correlation and your guess on the effect of age on course evaluation, explain whether the estimate of beauty rating in (a) is overestimated or underestimated.