ECO327Y5 Midterm: Recommended - Chapt 7.pdf
Document Summary
7. 9 (i) plugging in u = 0 and d = 1 gives (ii) setting gives or. While the estimated coefficient on shows that the gap is reduced at higher levels of college, it is never closed not even close. In fact, at four years of college, the difference in predicted log wage is still for women. The t statistic is about 1. 94, which gives a p-value against a two-sided alternative of just over . 05. Therefore, we would reject h0 at just about the 5% significance level. Controlling for the performance and experience variables, the estimated salary differential between catchers and outfielders is huge, on the order of 100 [exp(. 254) 1] 28. 9% [using equation (7. 10)]. (ii) this is a joint null, h0: The f statistic, with 5 and 339 df, is (iii) parts (i) and (ii) are roughly consistent. The evidence against the joint null in part (ii) is about 1. 78, and its p-value is about . 117.
