You will create a pdf file for your answers using R quarto markdown. The due date for the project is $5/5/2024,11$:$59$PM$.$ Submit the pdf file on Blackboard before the due date.

$(1)$ Open RStudio and open a new Quarto Document. For the title, use last$-$ name$\_$firstname$\_382\_$sectionnumber$\_$CPSPROJECT in capital letters. It should be something like this, DOE$\_$JOHN$\_382\_01\_$CPSPROJECT. The, click Create.

$(2)$ In the preamble section, insert Author and Date information. You can also provide a Subtitle. All of this information must be in quotation marks. It should look something like this.

Figure $1$: preamble

$(3)$ Highlight and delete the body of the document, starting from Quarto section all the way to the end.

$(4)$ Click on Render in the menu. R will ask you to save the file, choose $382$PROJECT folder, and for the file name use DOE$\_$JOHN$\_382\_01\_$CPSPROJECT. Click on Save. Then, DOE$\_$JOHN$\_382\_01\_$CPSPROJECT.qmd file will be processed and you should see the html version in Viewer.

$(5)$ Create a section heading and name it as CPS$\_$DATA$\_$EXERCISE.

$(6)$ Insert an R code chunk and import the data set CPSDATA.csv$.$ You can use read.csv$()$ to import. Name the container data frame as CPSDATA. Take a look at the column names and data types. Make sure that numeric columns are numeric.

$2$

Figure $2$: body

$(7)$ SEX is coded as $1$ for Males and $2$ for Females. Generate a new integer column in CPSDATA named FEMALE which is an indicator for Females.

$(8)$ RACE take several values raging from $100$ to $999.$ The value $100$ stands for White and $999$ stands for missing. Generate a new integer column in CPSDATA named NONWHITE which is an indicator for Non$-$whites.

$(9)$ MARST take values from $1$ to $9.$ Value $1$ indicates married and spouse being present. Value $9$ stand for missing. Generate a new integer column in CPSDATA named MARRIED which is an indicator for married and spouse being present.

$(10)$ EDUC$99$ take values from $0$ to $18.$ Value $1$ indicates no schooling. Value $18$ stand for Doctorate degree. Missing is coded as $0.$ Generate a new integer column in CPSDATA named HIGHSCHOOL which is an indicator for at least High school graduates.

$(11)$ INCWAGE is a continuous variable which indicates each respondent$$s total pre$-$tax wage and salary income. Missing is coded as $99999998$ or $99999999.$ Replace these values for missing to NA$.$

$(12)$ Region variable takes $9$ values starting from $11$ to $42.$ Replace $11$ and $12$ with $1$; $21$ and $22$ with $2$; $31,32$ and $33$ with $3$; $41$ and $42$ with $4.$

$(13)$ Drop SEX, RACE, MARST and EDUC$99$ from CPSDATA.

$(14)$ Create a table of descriptive statistics for INCWAGE, FEMALE, NONWHITE, MAR$-$ RIED, HIGHSCHOOL and REGION.

$(15)$ Calculate the fraction of observations with zero value in INCWAGE. Add $0\mathrm{.}01$ to the zero values under INCWAGE.

$3$

$(16)$ Estimate the following model and obtain heteroskedasticity robust standard errors. log$($INCWAGE$)=\backslash$beta $0+\backslash$beta $1$FEMALE $+\backslash$beta $2$NONWHITE $+\backslash$beta $3$MARRIED

$+\backslash$beta $4$HIGHSCHOOL $+$ u

$(17)$ Estimate the following model and obtain heteroskedasticity robust standard errors.

log$($INCWAGE$)=\backslash$beta $0+\backslash$beta $1$FEMALE $+\backslash$beta $2$NONWHITE $+\backslash$beta $3$FEMALE $\backslash$times NONWHITE $+\backslash$beta $4$MARRIED $+\backslash$beta $5$HIGHSCHOOL $+$ u

$(18)$ Estimate the following model and obtain heteroskedasticity robust standard errors. log$($INCWAGE$)=\backslash$beta $0+\backslash$beta $1$FEMALE $+\backslash$beta $2$NONWHITE $+\backslash$beta $3$FEMALE $\backslash$times NONWHITE

$+\backslash$beta $4$MARRIED $+\backslash$beta $5$HIGHSCHOOL $+$ R$2+$ R$3+$ R$4+$ u

where R$2,$ R$3$ and R$4$ are dummies for regions $2,3$ and $4.$

$(19)$ Explain the purpose including these region dummies. Explain why the first region is excluded.

$(20)$ Present your results in a table with $3$ columns. Interpret the coefficient estimates for $\backslash$beta $1,\backslash$beta $2$ and $\backslash$beta $3$ in column $(3).$