Problem 1:

Write short notes on all of the following:

(a) Log Linear regression model

(b) Lin-Log regression model

(c) Individual versus Overall Significance

Problem 2:

(a) An investigator claims that males in the financial sector are better paid than their female counterparts. He collects information on a random sample of 65 workers and estimates the following model (standard errors in brackets):

Wagesi = 15700 + 820*Educationi + 1125*Di --------------- (1)

R² = 0.57

where Wages refers to monthly wages in rupees

Education refers to number of years of education

D is a male dummy variable

(i) Interpret the coefficients of model (1).
(ii) Examine the claim of the investigator.

(b) The same investigator further claims that males earn more than females for every additional year of education. The following model is estimated:

Wagesi = 14200 + 680*Educationi + 935*Di + 350*Di*Educationi ------- (2)

R² = 0.68

(i) Write down the implied models for males and females.

(ii) Assess the second claim of the investigator.