Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 2: MLR: Part I Suppose we estimate the following population model: = Iwage Bo+B,female + v (3) where Iwage is the log of

image text in transcribedimage text in transcribed

Question 2: MLR: Part I Suppose we estimate the following population model: = Iwage Bo+B,female + v (3) where Iwage is the log of hourly wage, female is a dummy variable=1 if the worker is a female and 0 otherwise, v is the error term, and Var(v/female) = 0. For your information, here are basic descriptive statistics of the sample: Variable | Obs Mean Std. Dev. 1wage | female 526 526 1.623268 .4790875 Min Max .5315382 .6348783 3.218076 .500038 0 1 Results from estimating equation (3), by OLS are reported in the Stata output below: Source SS df MS Model | 20.7120004 Residual 127.617751 524 1 20.7120004 .243545326 Number of obs F(1, 524): Prob > F R-squared 526 85.04 0.0000 Adj R-squared = Total 148.329751 525 .28253286 Root MSE .4935 lvage | Coef. female | .3972175 -9.22 0.000 cons 1.81357 .0298136 60.83 0.000 Std. Err. t P>It [95% Conf. Interval] .0430732 -.4818349 1.755001 -.3126001 1.872139 (a) Does the intercept of equation (3) have a useful interpretation? Interpret the coefficient estimate of the intercept (cons) using the numbers reported in the Stata output. (b) Interpret the coefficient estimate of , in equation (3). Is the sign of this esti- mate what you expect it to be? Briefly explain. (c) Use this output to calculate proportion of the sample variation in 1wage that is explained by the independent variable female (or the proportion of females in our sample of 526 workers)? Explain your calculation clearly. (d) Use the output above to calculate 2, the unbiased estimator of 2. Explain your derivation clearly.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Stacey Whitecotton, Robert Libby, Fred Phillips

2nd edition

9780077493677, 78025516, 77493672, 9780077826482, 978-0078025518

More Books

Students also viewed these Accounting questions