To control for the effect of income on psoda , consider the model: psoda i = 0 + 1 prpblck i +

1. To control for the effect of income on psoda, consider the model:

psodai=β0+β1prpblcki+β2incomei+ui (B)

Estimate the model and report the estimation results. (Do NOT use scientific notation when reporting the estimates.)

Interpret the estimated coefficient on prpblck in Model B. ( ___ / 4%)

b. Test for the statistical significance of income on psoda using an F-test, stating the corresponding p-value, and drawing a diagram to show your conclusion. ( ___ / 8%)

c. Compare the estimated coefficients in Model A and Model B. Is the discrimination effect larger or smaller when you control for income? Why? (Hint: Refer to your results in (g), and the correlation coefficient between prpblck and income.) ( ___ / 6%)
d. Now estimate the following model and report the results: ( ___ / 4%)

e. psodai=β0+β1prpblcki+β2incomei+β3prppovi+ui (C)

Test for the equality of the marginal effects of prpblck and prppov on psoda using a t-test, stating the corresponding p-value, and drawing a diagram to show your conclusion. ( ___ / 8%)
A model with a constant price elasticity with respect to income may be more appropriate. Report estimates of the model: ( ___ / 4%)

log⁡(psodai)=β0+β1prpblcki+β2logincomei+β1prppovi+ui (D)

8. Interpret the estimated coefficient on log(income). ( ___ / 3%)