ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Related questions
Question
A regression of average weekly earnings (AWE, measured in dollars) on age
(measured in years) using a random sample of college-educated full-time
workers aged 25–65 yields the following:
AWE = 696.7 + 9.6 X Age, R2 = 0.023, SER = 624.1.
a. Explain what the coefficient values 696.7 and 9.6 mean.
b. The standard error of the regression (SER) is 624.1. What are the units
of measurement for the SER? (Dollars? Years? Or is SER unit-free?)
c. The regression R2 is 0.023. What are the units of measurement for the
R2? (Dollars? Years? Or is R2 unit-free?)
d. What does the regression predict will be the earnings for a 25-year-old
worker? For a 45-year-old worker?
e. Will the regression give reliable predictions for a 99-year-old worker?
Why or why not?
f. Given what you know about the distribution of earnings, do you
think it is plausible that the distribution of errors in the regression
is normal? (Hint: Do you think that the distribution is symmetric or
skewed? What is the smallest value of earnings, and is it consistent
with a
g. The average age in this sample is 41.6 years. What is the average
value of AWE in the sample?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- A researcher wants to test the relationship between the number of years of formal education received (X) and the average weekly earnings (Y) (measured in hundred dollars). A report released by a government agency suggests that the average weekly earnings of individuals with no formal education is equal to $545. The researcher wants to test whether the average weekly earnings with no formal education is $545 or greater than that. He collects data from a sample of 120 individuals and estimates the following regression function: Y-6.91+2.30X, (1.25) (4.25) where , is the predicted value of the weekly earnings for the individual and the standard errors for the coefficients appear in parenthesis. The f-statistic for the test the researcher wants to conduct will be (Round your answer to two decimal places)arrow_forwarddetermine the regression line equation plot the line on a graph and summarize the results( reject or do not) is there enough evidence?arrow_forwardYou use a dataset with 538 observations to run a simple linear regression. You find that the coefficient estimate is 3.258 and that the standard error of the coefficient estimate is 1.794. What is the lower end of the 98% confidence interval (of a two- sided test)? (you need to write a number that is rounded to the fourth digit after the decimal).arrow_forward
- The OLS estimation of the relationship between GRADE and HOURS of studying gives the following fitted equation (standard errors in parentheses): GRADEA = 38.15+0.048*HOURS (6.85) (0.01) Calculate the corresponding t statistic to test the slope coefficient for significance (Use two decimal places without rounding)arrow_forwardA researcher investigating whether government expenditure crowds out investment estimates a regression on data for 30 countries. I-investment; G-government recurrent expenditure; Y=gross domestic product; all measured in $US billion. P= population measured in million. Standard errors are in parentheses. Î= 18.10 (7.79) R² = 0.99 1.07G + 36Y (0.14) (0.02) She suspects that countries with higher GDP may have more variability in their investment. She sorts the observations by increasing size of gdp per capita (Y)and estimates the regression again for the 11 countries with the lowest gdp(Y)and the 11 countries with the largest gdp(Y). The RSS1 from the first regression is 7186. The RSS2 from the second regresison is 28101. Perform a Goldfeld-Quandt Test at a 5% significance level. a. The test statistic for this test is 0.256 b. The critical value defining the rejection region for Ho is 3.18 c. Is there heterscedasticity? Yes=1 or No-0. The answer is 0arrow_forwardIn multiple OLS regressions, if you are using power terms to fit for nonlinearity, how do you interpret the coefficients? For example: Yi=B1+B2X+B3X^2+Ui and B2 and B3 are both significant.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education