User Account

All Pages

What measures do you use to assess your model

Assignment Help Econometrics
Reference no: EM131132427

An economist decides to examine the standard of living of workers in a developing country. A survey was conducted and a representative sample of 2166 observations was obtained. He is particularly interested to determine the relationships among the following variables:

Wage - Weekly wage of worker (in dollar amount, $)

Female - 1 if worker is female. 0 if worker is male

Age - Age of worker (in years)

Education variables:

Lowedu - 1 if worker's highest qualification level is primary, 0 if otherwise

Interedu - 1 if worker's highest qualification level is secondary, 0 if otherwise

Highedu - 1 if worker's highest qualification level is tertiary, 0 if otherwise

Temp - 1 if worker holds a temporary work permit, 0 if otherwise

Training - 1 if worker has been through some form of training, 0 if otherwise

A partial view of the data is provided below. The full set of data is given in worksheet 'raw_data' of the data file. There are two parts to question 3, concerning simple regression and multiple regression.

A. Simple Regression:

(a) Obtain a scatter plot of Wage against Age. Is there a relationship between Wage and Age? If so, is the direction what you would expect?

(b) If you were to conduct a regression model, what will be your dependent variable and explanatory variable?

(c) Fit a regression model based on your answer in part (b). Be sure to show your Excel summary output and state the estimated equation.

(d) Interpret the estimated coefficients. Does the sign of each make sense?

(e) Using a 5% level of significance, perform a test to determine whether Age has a significant effect on Wage. Be sure to state your null and alternative hypotheses, and ALL other relevant information.

(f) Now create a new variable ln(Wage) where ln(Wage) is the natural log of Wage. Now graph a scatter plot of ln(Wage) against Age. Is there a relationship between In(Wage) and Age? Compare your answer with part (a) and identify the differences.

(g) Briefly explain how does using ln(Wage) change the relationship between Wage and Age, if any?

(h) Now fit a regression model based on ln(Wage) and Age. Be sure to show your Excel summary output and state the estimated equation.

(i) Interpret the estimated coefficients. Does the sign of each make sense?

(j) Compare your model in part (c) and part (h), which model performs better? What measures do you use to assess your model?

Note: In answering parts of the questions where statistical inference is required, you must include some or all of the following (as appropriate) for full credit:

1. the reason for using a particular formula or distribution

2. the null and alternative hypotheses

3. the critical value(s) used

4. the level of significance

5. the test statistics and its distribution employed in a test,

6. the decision rule, and

7. the conclusion.

Attachment:- RawData.rar

Reference no: EM131132427

Questions Cloud

Perform a box-cox test and state your conclusion : The residual sums of squares were 225.1 and 184.6, respectively. The number of observations was 868, the household reporting no expenditure on food at home being dropped. Perform a Box-Cox test and state your conclusion.
Perform a test of the explanatory power of the equation : Calculate the F statistic using R2 and perform a test of the explanatory power of the equation as a whole.
Explain the commands that were of greatest benefit to you : Explain the commands that were of greatest benefit to you and Your general comments on the overall lab experience.
Compare the coefficients and their standard error : Calculate correlation coefficients for the three ASVAB components.
What measures do you use to assess your model : Interpret the estimated coefficients. Does the sign of each make sense? Compare your model in part (c) and part (h), which model performs better? What measures do you use to assess your model
Guidelines to help an entrepreneur : whether there are any guidelines to help an entrepreneur identify when they could seek outside help from large firms with resources and capabilities?
Explain the purpose of monitoring logs : Explain the purpose of monitoring logs, their importance in understanding threats, what information the logs contain, and their relevance as an auditing tool in determining network health.
Explain the entrepreneurship process : Explain the entrepreneurship process.  - Identify & explain various stages / phases in entrepreneurship process.
How do we assign labor costs to a task in ms project : What are labor COSTS in MS project? How do we assign labor COSTS to a task in MS Project? Describe AND provide a screen shot of the steps.

Reviews

Write a Review

Econometrics Questions & Answers

  Find its book value after six years using the macrs method

An asset has an initial cost of $200,000, a salvage value of $25,000, and a recovery period of seven years. a. Find its book value after six years using the MACRS method. b. Find its book value after six years using the double declining balance metho..

  What is the probability of randomly selected bulb

1)The operations manager for a local bus company wants to decide whether he should purchase a new small, medium, or large bus for his company.

  Find e(z) and var(z)

Find E(Z) (1 dp) 2. Assuming that X and Y are statistically independent find var(Z) (1 dp) 3. Assuming that cov(X,Y) = 2 find var(Z) (1dp)

  When the same efforts must be made to uncork

Most restaurant customers tip according to a percentage rule between 15 and 25 percent of the bill. Diners who have dinner and a $20 bottle of wine usually pay the same percentage of the bottle price as diners who order a $100 bottle.

  What is the socially optimal number of vaccinations

If we decide to give the supplier a given dollar amount per vaccination supplied in order to reduce price and therefore increase the number of vaccinations to the social optimum, what would be the dollar value of that per-unit subsidy?

  Is antonio worse or better after the price change

Antonio buys five new college textbook during his first year at school at a cost of $80 each used books cost only $50 each. When the bookstore announces that there wukk be a 10 % increase in the price of new books.

  An automotive components manufacturing business is planning

an automotive components manufacturing business is planning to expand into a new product line somewhat related to its

  How is the curve related to the natural rate of unemployment

What were the aggregate supply shocks to the American economy during the 1970s and early 1980s How did these shocks affect interpretation of the Phillips Curve What are the characteristics of the long-run Phillips Curve

  Compute gdp-ndp and ni

Using the following national income accounting data, compute (a) GDP, (b) NDP, (c) NI. All figures are in billions. Compensation of employees U.S. exports of goods and services Consumption of fixed capital (depreciation) Government purchases Taxes on..

  What is the book value of the 5-axis milling machine

which requires at $10,000 license fee to use their design. Tooling costs $5000. Materials and consumables (cutting fluids, milling cutters, power, etc) are budgeted at $40 per product. Your company applies an overhead rate of 25%

  Briefly describe the details of the fictitious business

Assume that you have been hired as a managing consultant by a company to offer some advice that will help it make a decision as to whether it should shut down completely or continue its operations. It currently uses 100 workers to produce 6,000 un..

  Did the labor productivity ratio increase or decrease

The ABC Company has a large order for special uniforms to be used in an urgent operation. Working the normal two shifts of 40 hours each per week, the ABC production process usually produces 2, 500 uniforms per week at a standard cost of $120 each..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd