School of Economics Mingyang Li

Huazhong University of Science and Technology Spring 2023

Econometrics
Homework 4
Due 17:00 April 6, 2023
Total Points: 100

1. (30 points) The data in WAGE2.CSV on working men was used to estimate the following
equation:
d = 10.36 − .094sibs + .131meduc + .210f educ
educ
n = 772, R2 = .214
where educ is years of schooling, sibs is number of siblings, meduc is mother’s years of
schooling, and f educ is father’s years of schooling.
(a) Does sibs have the expected effect? Explain. Holding meduc and f educ fixed, by how
much does sibs have to increase to reduce predicted years of education by one year? (A
noninteger answer is acceptable here.)
(b) Discuss the interpretation of the coefficient on meduc.
(c) Suppose that Man A has no siblings, and his mother and father each have 12 years of
education. Man B has no siblings, and his mother and father each have 16 years of
education. What is the predicted difference in years of education between B and A?

2. (30 points) Consider the estimated equation from Example 4.3, which can be used to study
the effects of skipping class on college GPA:

\A = 1.39 + .412 hsGP A + .015 ACT − .083 skipped

colGP
(.33) (.094) (.011) (.026)

n = 141, R2 = .234.

(a) Using the standard normal approximation, find the 95% confidence interval for βhsGP A .
(b) Can you reject the hypothesis H0 : βhsGP A = .4 against the two-sided alternative at the
5% level?
(c) Can you reject the hypothesis H0 : βhsGP A = 1 against the two-sided alternative at the
5% level?

1
School of Economics Mingyang Li
Huazhong University of Science and Technology Spring 2023

3. (40 points) The following equations were estimated using the data in BWGHT.CSV:

\ = 4.66 − .0044 cigs + .0093 log(f aminc)

log(bwght)
(.22) (.0009) (.0059)

+ .016 parity + .027 male + .055 white

(.006) (.010) (.013)

n = 1, 388, R2 = .0472.
and
\ = 4.65 − .0052 cigs + .0110 log(f aminc) + .017 parity + .034 male
log(bwght)
(.38) (.0010) (.0085) (.006) (.011)

+ .045 white − .0030 motheduc + .0032 f atheduc

(.015) (.0030) (.0026)

n = 1, 191, R2 = .0493.
The variables are defined as in Example 4.9, but we have added a dummy variable for whether
the child is male and a dummy variable indicating whether the child is classified as white.

(a) In the first equation, interpret the coefficient on the variable cigs. In particular, what is
the effect on birth weight from smoking 10 more cigarettes per day?
(b) How much more is a white child predicted to weigh than a nonwhite child, holding the
other factors in the first equation fixed? Is the difference statistically significant?
(c) Comment on the estimated effect and statistical significance of motheduc.
(d) From the given information, why are you unable to compute the F statistic for joint
significance of motheduc and f atheduc? What would you have to do to compute the F
statistic?