The blue chart in the middle of this second page is the tabl

Epiant ny I I uicult to estimate precisely the partial effect of X,. hold- 6.4 ing X constant, if Xi and X2 are highly correlated. Exercises The first four exercises refer to the table of estimated regressions on page 206, computed using data for 1998 from the CPS. The data set consists of infor- mation on 4000 full-time full-year workers.The highest educational achieve- mation on 4000 full time full year workers The highest educational achieve ment for each worker was either a high school diploma or a bachelor\'s degree. The worker\'s ages ranged from 25 to 34 years.The data set also con- tained information on the region of the country where the person lived, mar- ital status, and number of children. For the purposes of these exercises, let AHE= average hourly earnings (in 1998 dollars) College- binary variable (1 if college, 0 if high school) Female- binary variable (1 if female, 0 if male) Age = age (in years) Ntheas binary variable (1 if Region-Northeast, 0 otherwise) Midwest = binary variable (1 if Region = Midwest, 0 otherwise) South-binary variable (1 if Region South, 0 otherwise) West binary variable (1 if Region West, 0 otherwise) 6.1 Compute R2 for each of the regressions 62 Using the regression results in column (1): a. Do workers with college degrees earn more, on average, than workers with only high school degrees? How much more? : Do men earn more than women on average? How much more? sing the regression results in column (2): with only high school degres? How much more? b. Do 63 Using t Using the regresson results in column(2) a. Is age S age an important determinant of earnings? Explain.

Solution

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