Question
I just need part C. Please show and explain working and reasoning. Tuition at your school has gone up, and administrators argue that the reason
I just need part C. Please show and explain working and reasoning.
Tuition at your school has gone up, and administrators argue that the reason for the increase is that the reputation of the school has increased. You decide to investigate this hypothesis by collecting data randomly for 100 national universities and liberal arts colleges from the 2017-2018 U.S News and World Report annual rankings. You run the following regression: = 7311.17 + 3985.20 0.20 + 8406.79 416.38 2376.51 R2 = 0.72, SER = 3773.35
where Cost is the tuition in dollars, Rep is the index in the U.S. News and World Report that ranges from 1 to 5 with 5 being the bets reputation, Size is the number of undergraduate students, Dpriv is a binary variable equal to 1 if the school is private, Dlibart is a binary variable equal to 1 if the school is a liberal arts school, and Drel is a binary variable equal to 1 if the school has a religious affiliation.
Type your numbers in two decimal places without thousands separators in the following questions.
a) The forecasted cost for a private liberal arts college, which has no religious affiliation, a size of 1500 students, and a reputation level of 4.5 is $___
b) If you switch from a private university to a public university that has a 0.5 lower reputation ranking and 10,000 more students, your tuition cost will decrease by $___
c)If you eliminate Size, and just regress Cost on Rep, Dpriv, Dlibart, and Drel, you expect the coefficient on Dpriv will ___ choose between 'increase' and 'decrease'
The reason is because Size is an omitted variable that is ___ correlated with Dpriv and ___ related to Cost. choose between 'positively' and 'negatively'
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