Consider the standard wage equation

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Reference no: EM13854887

Problem: Use the data in WAGE2.RAW for this exercise.

(i) Consider the standard wage equation

log(wage) = βa + βieduc + β2exper + β3tenture + u

State the null hypothesis that another year of general workforce experience has the same effect on log(wage) as another year of tenure with the current employer.

(ii) Test the null hypothesis in part (i) against a two-sided alternative, at the 5% significance level, by constructing a 95% confidence interval. What do you conclude?

Attachment:- WAGE2.DTA

Reference no: EM13854887

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