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1. Refer to question 1 in the first part of Assignment 2.
(a) Using LAD, estimate the parameters in the following model:
EXPENDi = M1 + M2AGEi + M3OWNRENTi + M4INCOMEi + M5INCOME2 i + Vi.
(HINT: Use the quantreg package for R.)
(b) Obtain standard errors of your estimates in part (a) using the Wild bootstrap with (B = 9, 999).
(c) Using the bootstrap (with B = 9, 999) test H0 : β2 = 0 vs. H0 : β2 6= 0 at the 5% level.
2. Replicate the illustration included in the file stoch-dom.pdf.1
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