Instructions: Code problems and solve using R studio, when necessary.

*Note* First step always use the following example to lead data Example is CHARITY data is mentioned follow:

load("CHARITY.RData")

df <- CHARITY"

assign(df, data)

QUESTION 21

1. Ch2.C7.(i) Use the data in CHARITY [obtained from Franses and Paap (2001)] to answer the following questions:

What percentage ofpeople gave no gift?

QUESTION 22

1. Ch2.C7.(ii) Use the data in CHARITY [obtained from Franses and Paap (2001)] to answer the following questions:

What is the average mailings per year?

QUESTION 23

1. Ch2.C7.(iii) Use the data in CHARITY [obtained from Franses and Paap (2001)] to answer the following questions:

Estimate the model by OLS and report the intercept value:

gift=₀+₁mailsyear

QUESTION 24

1. Ch2.C7.(iii) Use the data in CHARITY [obtained from Franses and Paap (2001)] to answer the following questions:

Estimate the model by OLS and report the intercept value:

gift=₀+₁mailsyear

what is the coeffeicient value formailsyear

QUESTION 25

1. Ch2.C7.(iii) Use the data in CHARITY [obtained from Franses and Paap (2001)] to answer the following questions:

Estimate the model by OLS and report the intercept value:

gift=₀+₁mailsyear

Report the R2 value for the same model in 3a

QUESTION 26

1. Ch2.C7.(v) Use the data in CHARITY [obtained from Franses and Paap (2001)] to answer the following questions:

using the model:gift=₀+₁mailsyear

What is the smallest predicted charitable contribution in the sample?

QUESTION 27

1. Ch2.C7.(v) Use the data in CHARITY [obtained from Franses and Paap (2001)] to answer the following questions:

using the model:gift=₀+₁mailsyear

Using this simple regression analysis, can you ever predict zero forgift

QUESTION 28

1. Ch3.C1(i) .A problem of interest to health officials (and others) is to determine the effects of smoking during pregnancy on infant health. One measure of infant health is birth weight; a birth weight that is too low can put an infant at risk for contracting various illnesses. Since factors other than cigarette smok-ing that affect birth weight are likely to be correlated with smoking, we should take those factors into account. For example, higher income generally results in access to better prenatal care, as well as bet-ter nutrition for the mother. An equation that recognizes this is;bwght=₀+₁cigs+₂faminc+u

What is the most likely sign forb2? (indicate if "negative" or "positive")

QUESTION 29

1. Ch3.C1(ii) .A problem of interest to health officials (and others) is to determine the effects of smoking during pregnancy on infant health. One measure of infant health is birth weight; a birth weight that is too low can put an infant at risk for contracting various illnesses. Since factors other than cigarette smok-ing that affect birth weight are likely to be correlated with smoking, we should take those factors into account. For example, higher income generally results in access to better prenatal care, as well as bet-ter nutrition for the mother. An equation that recognizes this is;bwght=₀+₁cigs+₂faminc+u

Do you think cigs and faminc are likely to be correlated (Blank 1), could this correlation negative or positive? (Blank 2)

choose either "yes" or "no" and either "negative" or "positive" for the answer sets. You can calculate the sample correlation between cigs and faminc to get an idea of the direction of correlation

QUESTION 30

1. Ch3.C1(iii) .A problem of interest to health officials (and others) is to determine the effects of smoking during pregnancy on infant health. One measure of infant health is birth weight; a birth weight that is too low can put an infant at risk for contracting various illnesses. Since factors other than cigarette smok-ing that affect birth weight are likely to be correlated with smoking, we should take those factors into account. For example, higher income generally results in access to better prenatal care, as well as bet-ter nutrition for the mother. An equation that recognizes this is;bwght=₀+₁cigs+₂faminc+u

Estimate the equation withoutfaminc, using the data in BWGHT. what is the interecept value?

QUESTION 31

1. Ch3.C1(iiI) .A problem of interest to health officials (and others) is to determine the effects of smoking during pregnancy on infant health. One measure of infant health is birth weight; a birth weight that is too low can put an infant at risk for contracting various illnesses. Since factors other than cigarette smok-ing that affect birth weight are likely to be correlated with smoking, we should take those factors into account. For example, higher income generally results in access to better prenatal care, as well as bet-ter nutrition for the mother. An equation that recognizes this is;bwght=₀+₁cigs+₂faminc+u

Estimate the equation withoutfaminc, using the data in BWGHT.

what is the coeeficient value forcigs (you do not need to indicate the sighn of the coeffeicient)

QUESTION 32

1. Ch3.C1(iiI) .A problem of interest to health officials (and others) is to determine the effects of smoking during pregnancy on infant health. One measure of infant health is birth weight; a birth weight that is too low can put an infant at risk for contracting various illnesses. Since factors other than cigarette smok-ing that affect birth weight are likely to be correlated with smoking, we should take those factors into account. For example, higher income generally results in access to better prenatal care, as well as bet-ter nutrition for the mother. An equation that recognizes this is;bwght=₀+₁cigs+₂faminc+u

Estimate the equation withoutfaminc, using the data in BWGHT.what is the value of R²?

QUESTION 33

1. Ch3.C1(iii) .A problem of interest to health officials (and others) is to determine the effects of smoking during pregnancy on infant health. One measure of infant health is birth weight; a birth weight that is too low can put an infant at risk for contracting various illnesses. Since factors other than cigarette smok-ing that affect birth weight are likely to be correlated with smoking, we should take those factors into account. For example, higher income generally results in access to better prenatal care, as well as bet-ter nutrition for the mother. An equation that recognizes this is;bwght=₀+₁cigs+₂faminc+u

Now, estimate the equation withfaminc,what is the coeffeicient offaminc?

QUESTION 34

1. Ch3.C1(iii) .A problem of interest to health officials (and others) is to determine the effects of smoking during pregnancy on infant health. One measure of infant health is birth weight; a birth weight that is too low can put an infant at risk for contracting various illnesses. Since factors other than cigarette smok-ing that affect birth weight are likely to be correlated with smoking, we should take those factors into account. For example, higher income generally results in access to better prenatal care, as well as bet-ter nutrition for the mother. An equation that recognizes this is;bwght=₀+₁cigs+₂faminc+u

Now, estimate the equation withfaminc,

Addingfamincsubstantially (A substancial effect should be a difference of atleast 0.5 in the coeffeicient)changes the estimated effect ofcigsonbwght?

(select 1)

True

False

QUESTION 35

1. Ch3 C3.(i) The file CEOSAL2 contains data on 177 chief executive officers and can be used to examine the effects of firm performance on CEO salary

Estimate a model relating annual salary to firm sales and market value. Make the modelof the constant elasticity variety for both independent variables

what is the coefficient for sales?

QUESTION 36

1. Ch3 C3.(i) The file CEOSAL2 contains data on 177 chief executive officers and can be used to examine the effects of firm performance on CEO salary

Estimate a model relating annual salary to firm sales and market value. Make the modelof the constant elasticity variety for both independent variables

what is the coefficient for the market value?

QUESTION 37

1. Ch3 C3.(i) The file CEOSAL2 contains data on 177 chief executive officers and can be used to examine the effects of firm performance on CEO salary

Estimate a model relating annual salary to firm sales and market value. Make the modelof the constant elasticity variety for both independent variables

what is the ₀value?

QUESTION 38

1. Ch3 C3.(i) The file CEOSAL2 contains data on 177 chief executive officers and can be used to examine the effects of firm performance on CEO salary

Estimate a model relating annual salary to firm sales and market value. Make the modelof the constant elasticity variety for both independent variables

what is the value of R²?

QUESTION 39

Ch3 C3.(ii) The file CEOSAL2 contains data on 177 chief executive officers and can be used to examine the effects of firm performance on CEO salary

Estimate a model relating annual salary to firm sales and market value. Make the modelof the constant elasticity variety for both independent variables

Addprofitsto this model. Why can this variable not be included in logarithmicform? (select 1)

	I.	We cannot include profits in logarithmic form because the answer will be inaccurate
	II.	We cannot include profits in logarithmic form because profit elasticity is not as important
	III.	We cannot include profits in logarithmic form because we cannot get the logs from the profits
	IV.	We cannot include profits in logarithmic form because profits are negative for nine of the companies in the sample

QUESTION 40

1. Ch3 C3.(ii) The file CEOSAL2 contains data on 177 chief executive officers and can be used to examine the effects of firm performance on CEO salary

Estimate a model relating annual salary to firm sales and market value. Make the modelof the constant elasticity variety for both independent variables

Addprofitsto this model.with the profit added, how much in percentage varaition of the salary is explained by the market value, sales and the profit?

QUESTION 41

1. Ch3 C3.(iii) The file CEOSAL2 contains data on 177 chief executive officers and can be used to examine the effects of firm performance on CEO salary.Estimate a model relating annual salary to firm sales, profits, coeten and market value. Make the modelof the constant elasticity variety for both independent variables

Add the variableceotento the model in part (2). What is the estimated percentage return foranother year of CEO tenure, holding other factors fixed?

QUESTION 42

1. Ch3 C3.(iv) The file CEOSAL2 contains data on 177 chief executive officers and can be used to examine the effects of firm performance on CEO salary.Estimate a model relating annual salary to firm sales, profits, coeten and market value. Make the modelof the constant elasticity variety for both independent variables

Find the sample correlation coefficient between the variables log(mktval) andprofits. Are thesevariables highly correlated?

QUESTION 43

1. Ch3 C3.(iv) The file CEOSAL2 contains data on 177 chief executive officers and can be used to examine the effects of firm performance on CEO salary.Estimate a model relating annual salary to firm sales, profits, coeten and market value. Make the modelof the constant elasticity variety for both independent variables

Find the sample correlation coefficient between the variables log(mktval) andprofits. Is it the correlation in 4a above causes biasness in the estimators

(select 1)

True

False

QUESTION 44

1. Ch3.C5 (i).Confirm the partialling out interpretation of the OLS estimates by explicitly doing the partialling out for WAGE1 (data that uses the 526 observations on workers on educ (years of education), exper (years of labor market experience), and tenure (years with the current employer) in an equation explaining log (wage)).

First Regresseduconexperandtenureand saving the residuals,r_{1:what is the value of eduaction when expereince and tenure are at zero?}

QUESTION 45

1. Ch3.C5 (i).Confirm the partialling out interpretation of the OLS estimates by explicitly doing the partialling out for WAGE1 (data that uses the 526 observations on workers on educ (years of education), exper (years of labor market experience), and tenure (years with the current employer) in an equation explaining log (wage)).

First Regresseduconexperandtenureand saving the residuals,r_1:what is the coefficient for tenure in the equation?

QUESTION 46

1. Ch3.C5 (i).Confirm the partialling out interpretation of the OLS estimates by explicitly doing the partialling out for WAGE1 (data that uses the 526 observations on workers on educ (years of education), exper (years of labor market experience), and tenure (years with the current employer) in an equation explaining log (wage)).

First Regresseduconexperandtenureand saving the residuals,r_1:what is the coefficient forexpereincein the equation?

QUESTION 47

1. Ch3.C5 (i).Confirm the partialling out interpretation of the OLS estimates by explicitly doing the partialling out for WAGE1 (data that uses the 526 observations on workers on educ (years of education), exper (years of labor market experience), and tenure (years with the current employer) in an equation explaining log (wage)).

Now, regress log(wage) on the residualsr₁. what is the coefficient for r_1?

QUESTION 48

1. Ch3.C5 (i).Confirm the partialling out interpretation of the OLS estimates by explicitly doing the partialling out for WAGE1 (data that uses the 526 observations on workers on educ (years of education), exper (years of labor market experience), and tenure (years with the current employer) in an equation explaining log (wage)).

Now, regress log(wage) on the saved residualsr₁.what is the R²value in the equation

QUESTION 49

1. Ch3.C5 (i).Confirm the partialling out interpretation of the OLS estimates by explicitly doing the partialling out for WAGE1 (data that uses the 526 observations on workers on educ (years of education), exper (years of labor market experience), and tenure (years with the current employer) in an equation explaining log (wage)).

Now regress log wage oneduc,exper, andtenure. what is the coeffeicient of education?

QUESTION 50

1. Ch3.C5 (i).Confirm the partialling out interpretation of the OLS estimates by explicitly doing the partialling out for WAGE1 (data that uses the 526 observations on workers on educ (years of education), exper (years of labor market experience), and tenure (years with the current employer) in an equation explaining log (wage)).

- Now, regress log(wage) on the residualsr₁. what is the coefficient for r_1?

-Now regress log wage oneduc,exper, andtenure. what is the coeffeicient of education?

Compare the coeffeicient ofeducationin b and that of r₁in a, why are they equal?

		(select a,b,c, or d) a) The regression of log(wage) on r1explains log(wage) usingeduc
		b) The regression of log(wage) on explains log(wage) using only the part ofeducthat is uncorrelated withexperandtenure
		c) It is a concidence
		d) the regression of log(wage) on r1explains log(wage) using only the part ofeducthat is uncorrelated withexperandtenurewhenseparate effects ofexperandtenureare not included.