Q1)

Log (wage) = bo + b1 educ + b2 educ*pareduc + b3 exper + b4 tenure + u

1) Return for another year of educ

Question 2

1) Log (bwght ) = bo + b1 npvis+ b2 npvis^2

Since t ratio is - 3.573

Ho: b2 = 0
Ha: b1 = 1
Testing at alpha = 5%
Since observations = infinite
T stat at alpha/2 (0.025)
+-1.96
Since t ratio of b2 > -1.96, we reject null hypothesis, b2 is significant, meaning the quadratic
term is significant at 5% alpha.

2) I- Taking derivative and equating it to zero.

Delta log(bwght)/delta (npvis) = B1 + b2*2*npvis = 0

Since b1 = 0.0189167
b2 = -0.000428756
putting in equation = 22.059 = 22 npvis.

II- Using count if on excel data, number of women who had atleast 22 prenatal visits

amount to be 21

3) The quadratic term here is just indicating there are birthweight gain benefits of prenatal visits
but this benefit is diminishing slightly with each additional prenatal visit
4)

New equation log(bwght)= bo + b1 npvis - b2 npvis^2 + b3 * mage - b4 *mage^2

Log(bwght) = b3 – b4 *2*mage = 0
= 0.0253820 – 0.000411867*2*mage = 0

Mage = 30.813 = 31 years.

746 of the women in the sample of 1,764 are 31 years of age or greater.

5)
Ho = all beta = 0
Ha = Ho not true.

F = 11.56402
since 11.56402 > Fstat, hence we reject null and the joint significance is significant.

6) We compare the R squared of with simple bwght as independent and log bwght as independent.
The bwght has better r squared then the other model.