ECON2209 Lecture 35: 26April_EconStats_Karagodsky
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Sum wage edu reg wage edu n = 1260. 1: wage = 10 + . 5 edu . 01edu2, nd impact of edu increasing by 1 year when edu = 10, what if i run w/ an interaction e ect. Wage = 10 + . 5edu + . 5city + . 1eduxcity, where 3 = . 1, interpret 3, test h0 : 3 = 0: find mean squared error: 1 n p(yi yi)2. Answers: coef on edu means each additional year of education leads to an additional. $ . 377 per hour: average wage when edu = 0 is . 56, cov(wage, edu) = 2. 59, h0 : = . 2. Ha : 6= . 2 cov(wage, edu) var(edu) cov(wage, edu) = var(edu) = . 377(2. 62)2. = 1. 18, fail to reject w/ 5% region note: we can use a standard normal chart since n is so large. 12 - (10. 56 + . 377 * 10) = 12 - 14. 33 -> -2. 33 wagepredicted.
