Assignment 4 F-15
YOUR_LAST_NAME, Your_first_name
ECON803-9:30 or 11:00
(Circle the one you attend)
Assignment 4
Save this document as A4-YOURLASTNAME Firstname.doc. Type or copy and paste your responses to the instructions and questions into this document following each instruction or question.
1. Assignment 4 F-14 Data contains observations on 1230 individuals. It includes their education, their mother’s education, their ability (a score), the number of siblings (brothers and sisters) the individual has, and a dummy for individuals living in the southern part of the US. Enter the data into EViews. Save your workfile as YOURLASTNAMEFirstname.wf1.
a. In EVIEWS name the variables you will use as follows: EDU, MOMS_EDU, ABILITY, SIBS AND SOUTH
b. Print the first 2 and the last 2 observations here:
2. Estimate an equation to show how an individual’s education is related to the other variables. Paste the output table here:
3. Choose the Representations View of the output and copy and paste the Substituted Coefficients form here:
4. For this equation briefly write out your interpretation of the meaning of each of the coefficients and comment on whether they seem reasonable or not.
5. Show how you calculate the ability elasticity of education:
6. Interpret this value
7. State the units of measurement of each variable and coefficient in the equation.
8. Carefully describe what will happen to the coefficients, standard errors of coefficients, and t-values for coefficients for each of the following changes individually (do not accumulate the changes). You should make a table to summarize your results and put it here:
a. Suppose that education was measured in months instead of years
b. Suppose that the ability variable was transformed by dividing by 100
Insert your table here:
9. Test the joint hypothesis at the 3.19% level of significance that the effect of ability on education is twice the size of the effect of mother’s education and that the effect of an increase in the number of siblings by one is the same as the effect of moving to the south.
10. What is the exact significance level for the test?:
11. Convert each variable into a “standardized” variable by subtracting the mean and dividing by the standard deviation. Print a table of the first 5 and the last 5 observations for all the standardized variables here:
12. Estimate the regression using the standardized variables and paste the output here:
13. Interpret each of the resulting “beta coefficients” of this regression.
14. Compare the Adjusted R-square values from 2 and 10 and discuss briefly.
15. Estimate the equation in log-log functional form and paste the output here:
16. What is the ability elasticity of education from this equation? Comment on the difference from the previously calculated elasticity.
17. Comment on the Adjusted R-square value from this equation in comparison with the linear form.
18. Save your workfile as YOURLASTNAME_Firstname.wf1.
19. Send a copy to the a ...
1. Assignment 4 F-15
YOUR_LAST_NAME, Your_first_name
ECON803-9:30 or 11:00
(Circle the one you attend)
Assignment 4
Save this document as A4-YOURLASTNAME Firstname.doc.
Type or copy and paste your responses to the instructions and
questions into this document following each instruction or
question.
1. Assignment 4 F-14 Data contains observations on 1230
individuals. It includes their education, their mother’s
education, their ability (a score), the number of siblings
(brothers and sisters) the individual has, and a dummy for
individuals living in the southern part of the US. Enter the data
into EViews. Save your workfile as
YOURLASTNAMEFirstname.wf1.
a. In EVIEWS name the variables you will use as follows: EDU,
MOMS_EDU, ABILITY, SIBS AND SOUTH
b. Print the first 2 and the last 2 observations here:
2. Estimate an equation to show how an individual’s education
is related to the other variables. Paste the output table here:
3. Choose the Representations View of the output and copy and
paste the Substituted Coefficients form here:
4. For this equation briefly write out your interpretation of the
meaning of each of the coefficients and comment on whether
they seem reasonable or not.
5. Show how you calculate the ability elasticity of education:
2. 6. Interpret this value
7. State the units of measurement of each variable and
coefficient in the equation.
8. Carefully describe what will happen to the coefficients,
standard errors of coefficients, and t-values for coefficients for
each of the following changes individually (do not accumulate
the changes). You should make a table to summarize your
results and put it here:
a. Suppose that education was measured in months instead of
years
b. Suppose that the ability variable was transformed by dividing
by 100
Insert your table here:
9. Test the joint hypothesis at the 3.19% level of significance
that the effect of ability on education is twice the size of the
effect of mother’s education and that the effect of an increase in
the number of siblings by one is the same as the effect of
moving to the south.
10. What is the exact significance level for the test?:
11. Convert each variable into a “standardized” variable by
subtracting the mean and dividing by the standard deviation.
Print a table of the first 5 and the last 5 observations for all the
standardized variables here:
12. Estimate the regression using the standardized variables and
paste the output here:
13. Interpret each of the resulting “beta coefficients” of this
regression.
14. Compare the Adjusted R-square values from 2 and 10 and
discuss briefly.
15. Estimate the equation in log-log functional form and paste
the output here:
16. What is the ability elasticity of education from this
3. equation? Comment on the difference from the previously
calculated elasticity.
17. Comment on the Adjusted R-square value from this equation
in comparison with the linear form.
18. Save your workfile as YOURLASTNAME_Firstname.wf1.
19. Send a copy to the assistant.
20. Print your Word file and bring it to class
Sheet1obsYEARS OF EDUCATIONYEARS OF MOTHER’S
EDUCATIONABILITY SCORENUMBER OF
SIBLINGSRESIDES IN SOUTHERN
USobsnumedumoms_eduabilitysibssouth115125.0277381021312
2.0371740315122.47589520415123.6092410513122.636546206
18123.4743342071313-1.7648085081212-
0.13359841913102.07243130101214-
0.3384610111291.38071201212123.412799101317174.3654961
01413161.090446301517165.08278420161652.12905420171610
3.469769101815124.268983101915112.417693202020113.1250
01202114104.236644202215165.316357202313142.6330470241
6133.04666530251192.5708350261291.112235502711121.0885
29302812123.5426420291212-
0.03169700309121.890898303116164.802668203214163.64620
5203313103.609689303415133.786006003511121.75961621361
2122.10501303714121.548639203818162.905734203916122.49
2563104014122.936283104117104.194712104217205.89893510
4316162.8716110441212-
0.788233204515133.286462104614163.255798104789-
1.925979204815122.321783204912122.813435305015124.5591
15305115122.757675205215120.789738205313102.1513293054
12100.5502263055109-
0.378022705614123.52669305712122.178751305816124.10213
15919132.3541224160816-1.8695184061118-
0.70818206212122.466771206314125.17607306416124.189257
306512121.497999406615123.038453006713122.498198616812
