Textbook Notes (368,795)
Economics (748)
ECON 3U03 (5)
Chapter 2

# Chapter 2

2 Pages
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School
Department
Economics
Course
ECON 3U03
Professor
James Bruce
Semester
Winter

Description
(c) EDUC increseses -> residuals also increase, this suggests error var is larger for larger values of EDUC. F SR1 – SR5 hold, there should not be any patterns evident in residuals. (d) Estimated equations are If female: Wage = -14.1681 + 2.3575EDUC If male: Wage = -3.0544 + 1.8753EDUC If black: Wage = -15.0859 + 2.4491EDUC If white: Wage = -6.5507 + 1.9919EDUC Extra year of education for black worker increases the wage rate higher than for a white worker. Similarly for female worker then male worker. (e) estimated quadratic equation; Wage = 6.08283 + 0.073489EDUC 2 Marginal effect is therefore: slope = d(Wage)/dEDUC = 2(0.073489)EDUC For person with 12 yea
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