Please answer the following questions!!!

1) If you assume that the model we ran is correctly specified, would you conclude that blacks are discriminated? e.

2)Test the null hypothesis H0: 9 = 0.4 vs H1: 9 > 0.4 at 1 percent significance level.

3) Calculate the 99% confidence interval for 7.

The dataset LOANAPP from Wooldridge is indeed utilized for the 1996 paper The Cultural Affinity Hypothesis and Mortgage Lending Decisions, Journal of Real Estate Finance and Economics 13, 57-70 by W.C. Hunter and M.B. Walker. In this data, approve is the dummy dependent variable which is equal to 1 if a mortgage loan to an individual was approved; hrat and obrat measure percentages of housing expenditures and other obligations, normalized by total income; dep is the number of dependents; sch is a dummy variable denoting high school graduates; white and hispan are dummy variables for white and Hispanic ethnicities with blacks being the reference category; unem, male, married, and cosign are dummy variables denoting being unemployed, males, being married, and having a cosigner for the loan. Letting X denote the vector of the regressors of interest, the econometrics model of interest is provided below: Pr(approve = 1|x) = G(Bo + B hrat + B2obrat + B3 dep + B4sch + Bswhite +Bohispan + Bunem + Bgmale + B,married + Blocosign), where G denotes the standard normal cumulative distribution function. The regression output and some other statistics are presented below: Number of obs LR chi2 (10) Prob > chi2 Pseudo R2 1,971 144.56 0.0000 0.0979 Log likelihood --665.69811 approve Coef. Std. Err. z P> 121 hrat obrat 1 dep sch white hispan unem male ! married cosign cons .0128048 -.0346974 -.0538628 .0558429 819701 .2315558 -.0399494 -.0444482 250487 .1398014 1.372325 .0064934 .0056213 .0361607 .0904552 .1052271 .1656895 .0165387 .1050657 .0895493 .2317651 .2266169 1.97 -6.17 -1.49 0.62 7.79 1.40 -2.42 -0.42 2.80 0.60 6.06 0.049 0.000 0.136 0.537 0.000 0.162 0.016 0.672 0.005 0.546 0.000 (95% Conf. Interval) .0000779 .0255317 - .045715 -.0236798 -. 1247365 .017011 -. 121446 .2331319 .6134597 1.025942 -.0931896 .5563012 -.0723647 -.0075341 -2503731 . 1614767 .0749736 .4260003 -.3144499 .5940527 .9281639 1.816486 . margins, dydx (*) Average marginal effects Model VCE OIM Number of obs 1,971 Expression : Pr (approve), predicto dy/dx w.r.t. : hrat obrat dep sch white hispan unem male married cosign Delta-method Std. Err. dy/dx 2 P> 121 (95% Conf. Interval) hrat obrat 1 dep! sch white .0023665 -.0064125 -.0099545 .0103205 . 151491 .0011984 .001034 .0066799 .0167166 .01 90326 1.97 -6.20 -1.49 0.62 7.96 0.048 0.000 0.136 0.537 0.000 .0000176 -.0084392 -.0230469 -.0224435 . 1141878 .0047154 -.0043859 .0031379 .0430844 .1887941 hispan1 unem! male 1 married cosign .0427944 -.0073832 -.0082146 .0462931 .025837 .0305766 .0030529 .0194169 .0165313 .0428289 1.40 -2.42 -0.42 2.80 0.60 0.162 0.016 0.672 0.005 0.546 -.0171346 ..0133668 -.046271 .0138924 -.058106 .1027234 ..0013995 .0298418 .0786938 .1097801 . test white hispan (1) (approve) white - 0 (2) (approve hispan - 0 chi2(2) - 69.73 Prob > chi2 - 0.0000 tab dep Freq. Percent number of dependents 01 Cum. 31 1,175 317 327 126 31 5 3 1 1 59.16 15.96 16.47 6.34 1.56 0.25 0.15 0.05 0.05 59.16 75.13 91.59 97.94 99.50 99.75 99.90 99.95 100.00 51 61 71 81 Total 1 1,986 100.00 The dataset LOANAPP from Wooldridge is indeed utilized for the 1996 paper The Cultural Affinity Hypothesis and Mortgage Lending Decisions, Journal of Real Estate Finance and Economics 13, 57-70 by W.C. Hunter and M.B. Walker. In this data, approve is the dummy dependent variable which is equal to 1 if a mortgage loan to an individual was approved; hrat and obrat measure percentages of housing expenditures and other obligations, normalized by total income; dep is the number of dependents; sch is a dummy variable denoting high school graduates; white and hispan are dummy variables for white and Hispanic ethnicities with blacks being the reference category; unem, male, married, and cosign are dummy variables denoting being unemployed, males, being married, and having a cosigner for the loan. Letting X denote the vector of the regressors of interest, the econometrics model of interest is provided below: Pr(approve = 1|x) = G(Bo + B hrat + B2obrat + B3 dep + B4sch + Bswhite +Bohispan + Bunem + Bgmale + B,married + Blocosign), where G denotes the standard normal cumulative distribution function. The regression output and some other statistics are presented below: Number of obs LR chi2 (10) Prob > chi2 Pseudo R2 1,971 144.56 0.0000 0.0979 Log likelihood --665.69811 approve Coef. Std. Err. z P> 121 hrat obrat 1 dep sch white hispan unem male ! married cosign cons .0128048 -.0346974 -.0538628 .0558429 819701 .2315558 -.0399494 -.0444482 250487 .1398014 1.372325 .0064934 .0056213 .0361607 .0904552 .1052271 .1656895 .0165387 .1050657 .0895493 .2317651 .2266169 1.97 -6.17 -1.49 0.62 7.79 1.40 -2.42 -0.42 2.80 0.60 6.06 0.049 0.000 0.136 0.537 0.000 0.162 0.016 0.672 0.005 0.546 0.000 (95% Conf. Interval) .0000779 .0255317 - .045715 -.0236798 -. 1247365 .017011 -. 121446 .2331319 .6134597 1.025942 -.0931896 .5563012 -.0723647 -.0075341 -2503731 . 1614767 .0749736 .4260003 -.3144499 .5940527 .9281639 1.816486 . margins, dydx (*) Average marginal effects Model VCE OIM Number of obs 1,971 Expression : Pr (approve), predicto dy/dx w.r.t. : hrat obrat dep sch white hispan unem male married cosign Delta-method Std. Err. dy/dx 2 P> 121 (95% Conf. Interval) hrat obrat 1 dep! sch white .0023665 -.0064125 -.0099545 .0103205 . 151491 .0011984 .001034 .0066799 .0167166 .01 90326 1.97 -6.20 -1.49 0.62 7.96 0.048 0.000 0.136 0.537 0.000 .0000176 -.0084392 -.0230469 -.0224435 . 1141878 .0047154 -.0043859 .0031379 .0430844 .1887941 hispan1 unem! male 1 married cosign .0427944 -.0073832 -.0082146 .0462931 .025837 .0305766 .0030529 .0194169 .0165313 .0428289 1.40 -2.42 -0.42 2.80 0.60 0.162 0.016 0.672 0.005 0.546 -.0171346 ..0133668 -.046271 .0138924 -.058106 .1027234 ..0013995 .0298418 .0786938 .1097801 . test white hispan (1) (approve) white - 0 (2) (approve hispan - 0 chi2(2) - 69.73 Prob > chi2 - 0.0000 tab dep Freq. Percent number of dependents 01 Cum. 31 1,175 317 327 126 31 5 3 1 1 59.16 15.96 16.47 6.34 1.56 0.25 0.15 0.05 0.05 59.16 75.13 91.59 97.94 99.50 99.75 99.90 99.95 100.00 51 61 71 81 Total 1 1,986 100.00