A researcher analyzing labor supply of single nevermarried p

A researcher analyzing labor supply of single (never-married) persons in the U.S. has obtained the following regression results

H=921.71+0.17W-0.02V+other variables+e

(64.21) (0.65) (0.01)

where H=hours worked per year, W=wage rate (in $/hour), V=nonwork income (in $/year), and e=error term. Figures in parentheses under the coefficient estimates are standard errors. The \"other variables\" are education, age, and place of residence. Ignore the possibility of missing-variables bias.

A. We are interested in determining the sign and approximate magnitude of the substitution effect of an increase in the wage rate W. Do these results provide ant information about this? If not, explain why not. If so, explain what information is provided by these results, and why.

B. These results were obtained using data for either men or women -- but, unfortunately, the researcher forgot to indicate which! Based on what you know about labor supply, is it more likely that these results refer to men rather than women, or is it more likely that these results refer to women rather than men? Explain your answer.

I need the detail explanation for both A and B.

6. A researcher analyzing labor supply of single (never-married) persons in the U.S. has obtained the following regression results H = 921.71 + 0.17 W – 0.02 V + other variables + e (64.21) (0.65) (0.01) where H = hours worked per year, W = wage rate (in $/hour), V = nonwork income (in $/year), and er error term. Figures in parentheses under the coefficient estimates are standard errors. The \"other variables\" are education, age, and place of residence. Ignore the possibility of missing-variables bias. We are interested in determining the sign and approximate magnitude of the substitution effect of an increase in the wage rate W. Do these results provide any information about this? If not, explain why not. If so, explain what information is provided by these results, and why. These results were obtained using data for either men or women-but, unfortunately, the researcher forgot to indicate which! Based on what you know about labor supply, is it more likely that these results refer to men rather than women, or is it more likely that these results refer to women rather than men? Explain your answer.

Solution

A). These results will not give complete information of about wage rate. They have given H hours worked per year, W is wage rate and V is nonwork income and e denotes an error. We cannot judge the solution by giving this information. Normally, the wage rate varies from person to person. Because, the person efficiency, education, age and his/her location of residence are played a vital role to calculate the wage rate.

Suppose If you compare in between two persons, one is above 40 years and another one is prime-age adult 25 years. Here the efficiency, thinking, education, and the number of hours work will consider to calculate the wage rate. Normally 25 years of person will have more efficiency compare with 40 plus years age person.

So, the information given in the question is not enough to provide the fruitful information.

B). Yes, the information is not given about gender either it is men OR women. In between this gender, normally men have more efficiency comparing with women.

We may see different types of classification here. Let us see some few examples regarding this question.

The men had 33 years age and he had a good efficient person but education is not there. In the opposite women had 23 years of age and a good education background & also a very efficient person. Here, if you comparing in between these two persons obviously women are efficient compared with men. Because the education and efficiency and age need to consider here. Ultimately women will get a good wage compared with men.

If the labor supply did well by considering in the gender wise and additionally to think about education, age, efficiency and experience then the wage rate will vary from person to person. So, the H hours worked per year, I thought that this information is completely based on mixed gender.