Reference no: EM13933133
In your role as an economic analyst you have been asked the following question:
• How much does education affect wage rates?
The Excel data file (wage) contains 100 observations for each of the following variables:
|
Variable
|
Label
|
|
wage
|
Earnings per hour
|
|
ln_wage
|
The log of earnings per hour
|
|
educ
|
Years of education
|
|
educ2
|
Years of education squared
|
Instructions:
Conduct a simple linear regression analysis to examine the relationship between ‘education' (the independent variable) and ‘wage' (the dependent variable). Using the Excel data file, prepare a 2000 word report using the following structure:
• Purpose
• Background
• Method
• Results
• Discussion
• Recommendations
In preparing your report you must address the following questions:
(a) Obtain summary statistics and histograms for the variables WAGE and EDUC. Discuss the data characteristics.
(b) Estimate the linear regression WAGE = β1 + β2EDUC + ε and interpret the slope.
(c) Calculate the residuals and plot them against EDUC. Are any patterns evident and, if so, what does this mean?
(d) Estimate the quadratic regression WAGE = α1 + α2EDUC2 + ε and interpret the results. Estimate the marginal effect of another year of education on wage for a person with 12 years of education, and for a person with 14 years of education. Compare these values to the estimated marginal effect of education from the linear regression in part (b).
(e) Construct a histogram of ln(WAGE). Compare the shape of this histogram to that for WAGE from part (a). Which appears to be more symmetric and bell-shaped?
(f) Estimate the log-linear regression ln(WAGE) = γ1 + γ2EDUC + ε and interpret the slope. Estimate the marginal effect of another year of education on wage for a person with 12 years of education, and for a person with 14 years of education. Compare these values to the estimated marginal effects of education from the linear regression in part (b) and quadratic in part (d).
Your report must be submitted as a single file (maximum of 2000 words) with an appendix that contains the details of your statistical analyses.
|
What is the debt-to-equity ratio
: Debt-to-Equity Ratio Will Able Corporation's balance sheet showed the following amounts: Current Liabilities, $24,505; Bonds Payable, $18,000; Lease Obligations, $24,183; and Notes Payable, $6,595. Total stockholders' equity was $36,100. Required: Wh..
|
|
Which of the three types of preference toward risk
: Which of the three types of preference toward risk (averse, neutral and seeking) understand that is best suited to maximize the profits of an enterprise? There is a preference that is better than the other?
|
|
Calculate breakeven point in units at each of selling prices
: The Pointer Appliance Company is investigating the additional of a new and improved pulsating blender to its line of consumer appliances. The product chops, grinds, grates and blends smoothies twice as fast as all other blenders on the market. The bl..
|
|
Explore facebook paying close attention to how technology
: Explore the Facebook paying close attention to how the technology enables the members of Facebook to communicate and collaborate. What findings show how the collaboration theory is being used within Facebook to keep members engaged in the communic..
|
|
Calculate the residuals and plot them against educ
: Obtain summary statistics and histograms for the variables WAGE and EDUC - Calculate the residuals and plot them against EDUC. Are any patterns evident and, if so, what does this mean?
|
|
What social learning theorists predict about group behaviour
: What would social learning theorists predict about group behaviour in the next session? Describe how Multidimensional or Systems Views could be applied to solutions for Karen's developmental concerns.
|
|
Floating rate loans yielding the t-bill rate plus
: A commercial bank has $200 million of floating rate loans yielding the T-bill rate plus 2%. These loans are financed by $200 million of fixed-rate deposits costing 9%. A savings association has $200 million of mortgages with a fixed rate of 13%. What..
|
|
Determine the amount of cost of goods sold
: Prepare a schedule to determine the amount of cost of goods sold.
|
|
Write a brief assessment of the individual client
: Identify what other questions you might ask her in order to explore the biological, developmental, and psychological components of assessment.
|