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APA
Subject:
Mathematics & Economics
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English (U.S.)
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Topic:

Econometrics: Data Description

Coursework Instructions:

I attached files.
Context
Run a regression of years of completed education (ED) on distance to the nearest college (Dist). What is the estimated slope?
Run a regression of ED on Dist, but include some additional regressors to control for characteristics of the student, the student’s family, and the local labor market. In particular, include as additional regressors Bytest, Female, Black, Hispanic, Incomehi, Ownhome, DadColl, Cue80, and Stwmfg80. Interpret the estimated effect of all these regressors on ED.
Is the estimated effect of Dist on ED in the regression in (b) substantively different from the regression in (a)? Based on this, does the regression in (a) seem to suffer from important omitted variable bias? Explain.
Compare the fit of the regression in (a) and (b). Comment.
The value of the coefficient on DadColl is positive. What does this coefficient measure?
Explain why Cue80 and Swmfg80 appear in the regression. Are the signs of their estimated coefficients (+ or -) what you would have believed? Interpret the magnitudes of these coefficients.
Bob is a black male. His high school was 20 miles from the nearest college. His base year composite test score (Bytest) was 58. His family income in 1980 was $26,000, and his family owned a home. His mother attended college, but his father did not. The unemployment rate in his county was 7.5%, and the state average manufacturing hourly wage was $9.75. Predict Bob’s years of completed schooling using the regression in (b). Show all the steps.
Jim has the same characteristics as Bob except that his high school was 40 miles from the nearest college. Predict Jim’s years of completed schooling using the regression in (b).

Coursework Sample Content Preview:

Econometrics: Data Description Assignment
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Econometrics: Data Description Assignment
a) Regression equation of years of completed education (ED) on distance to the nearest college (Dist)
Variable

Coefficient

Std. Error

t-Statistic

Prob.  

DIST

-0.073373

0.013750

-5.336274

0.0000

C

13.95586

0.037724

369.9451

0.0000

R-squared

0.007450

    Mean dependent var

13.82929

Adjusted R-squared

0.007188

    S.D. dependent var

1.813969

S.E. of regression

1.807438

    Akaike info criterion

4.022224

Sum squared resid

12394.36

    Schwarz criterion

4.025513

Log likelihood

-7632.182

    Hannan-Quinn criter.

4.023393

F-statistic

28.47582

    Durbin-Watson stat

1.768991

Prob(F-statistic)

0.000000




From the above table, the coefficient of distance to the nearest college is -0.073373, which is the slope.b) Regression of years of completed education (ED) on Distance to nearest college (Dist) with additional regressors: Bytest, Female, Black, Hispanic, Incomehi, Ownhome, DadColl, Cue80 and Stwmfg80
Variable

Coefficient

Std. Error

t-Statistic

Prob.  

DIST

-0.031539

0.012370

-2.549555

0.0108

BYTEST

0.093820

0.003162

29.66931

0.0000

FEMALE

0.145408

0.050589

2.874308

0.0041

BLACK

0.367971

0.071363

5.156331

0.0000

HISPANIC

0.398520

0.074462

5.352011

0.0000

INCOMEHI

0.395198

0.060531

6.528878

0.0000

OWNHOME

0.152131

0.066807

2.277160

0.0228

DADCOLL
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