econometrics

Econ 390-03

Assignment 13

Due date is Sunday, Nov 22nd 11:59 PM. Late submissions are not accepted.

1. Open the data “ch8_cps” on Rstudio

2. How many variable, number of observations, and dummy variables do we have?

3. Run a regression of ahe on age, what is the model and what is the predicted equation

4. What is the effect of age on ahe?

5. Provide the scatter plot and the fitted regression line.

6. Run a non-linear cubic regression of ahe on age (meaning run ahe on age, age squared, and age cubic. )

7. Write down the model and the predicted equation for part 6.

8. Looking at the significance of the cubic term in regression part 6, do you prefer this model (cubic) or would you go with a quadratic model? Or even a linear model?

9. In part 6 what is the effect of age on ahe ? is it easy to read? (No)

10. Provide/add the fitted curve of regression part 6 on the scatter plot (you did in part 5).

11. Run a multiple regression of ahe over age, age squared, age cubic, female, yrseduc. (all in 1 regression). Which coefficients are significant? why?

12. What is the RSquared of regression you run in part 11? What does this number mean?