assignment

Econ 390-01

Assignment 8 (this is the 7th assignment but refers to Module 8)

Due date is Wednesday Oct 21th 11:59 PM. Late submissions are not accepted.

YOU SHOULD ONLY AND ONLY WORK WITH RSTUDIO . IF YOU CORRECTLY ANSWER WITH EXCEL IT DOES NOT COUNT.

1. Open the data “ch8_cps” in RStudio

2. Read the description of the data uploaded on Canvas

3. How many variables and how many observations do we have in the data?

4. What is “ahe” and “yrseduc”

5. What are the mean and variance of “yrseduc”.

6. Plot ahe over yrseduc

7. Run a regression of ahe on yrseduc

8. What is the model/population equation here?

9. What is the regression/predicted equation here?

10. What is the effect of yrseduc on ahe?

11. What is the value of predicted ahe for Bob who has 13 yrseduc.

12. What percentage of variation in earnings is explained by years of education (Rsquared)? Why?

13. Is the slope significant? (please provide the null and alternative, the formula of the zscore, and find the conclusion from both approaches, you should also provide the interpretation of the result and what a “significant” or “insignificant” coefficient means.)

14. Provide graph and the regression line in your submission

Please save your r-script and submit it as an attachment on canvas the way you submit other files. You can also save and attach the plot as a PDF file.

I explained all the steps for this assignment in the lecture videos, I just used the Caschool data instead .