Q1. From a local town record, information are gathered about workers' wages and their educational achievements. You are

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Q1 From A Local Town Record Information Are Gathered About Workers Wages And Their Educational Achievements You Are 1 (155.28 KiB) Viewed 32 times

Q1. From a local town record, information are gathered about workers' wages and their educational achievements. You are interested in exploring a possible relationship between the rate of change in workers' wages and the the number of education years completed. a. Write down a model (not an estimated equation) that implies percentage changes (or relative changes) in wage due to changes years of education. Indicate which parameter measures the relative change in worker's wage. (2 pts). b. A random sample of 526 workers provided the following information summaries: Y = In(wage) x = educ ΣΥ = 853.8392 X = 6608 ΣΥ? = 1534.34 ΣΧ? = 87040 XY = 11059.64 n = 526 Use the summarized data provided above to estimate the model: In(wage) = Be + B1 educ + u , where: wage is the hourly worker's wage, and educ is the number of years of education completed by the worker. (2pts) C. Explain in words what the estimated equation in b. represents. Provide an interpretation for each coefficient estimate from b. (3pts). d. Calculate the estimated effect on a worker's wage of 5 additional years of education. (1pt). e. Calculate the standard error for each coefficient estimate (3pts). f. Calculate the coefficient of determination R-Squared, and provide an interpretation for it (2pts). g. With a 5% significance level, is there a significant evidence that the number of years of education has a significant impact on worker's wage? (state clearly what are the relevant null and alternative hypotheses, and explain also what are the implications you draw from your conclusion). (3pts). h. Provide a 95% interval estimate for the slope and for the intercept coefficients. (2 pts).