Econ 390-03
Assignment 14
Due date is Sunday, Nov 29th 11:59 PM. Late submissions are not accepted.
Note I am aware the first half of this assignment is similar to assignment 13, but I want you to compare the cubic specification with a linear log specification.
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 regression of ahe on log(age)
12. What is the effect of age on ahe in this model 11? Easy to read? (yes )
13. Provide/add the fitted curve of regression part 11 on the scatter plot (you did in part 5 and 10).
14. Write down the model and predicted equation for part 11.
15. What is Rsquared in regression in part3, regression in part6 and regression in part 11?Data
ahe yrseduc female age northeast midwest south west
13.0769233704 13 1 56 1 0 0 0
38.4615402222 18 0 59 1 0 0 0
62.3931617737 12 0 52 1 0 0 0
21.367521286 18 0 38 1 0 0 0
15.6862745285 14 0 38 1 0 0 0
22.5961532593 13 1 41 1 0 0 0
62.125 13 0 42 1 0 0 0
12.1794872284 12 0 48 1 0 0 0
24.0384616852 14 1 42 1 0 0 0
16.1713294983 16 0 51 1 0 0 0
16.1713294983 16 1 49 1 0 0 0
38.4615402222 16 0 33 1 0 0 0
15.3846149445 14 1 52 1 0 0 0
22.1153850555 14 0 55 1 0 0 0
29.8076915741 12 0 51 1 0 0 0
26.4423084259 12 0 59 1 0 0 0
14.102563858 11 0 52 1 0 0 0
12.5192308426 13 0 44 1 0 0 0
14.4230766296 19 1 37 1 0 0 0
11.2179489136 16 0 59 1 0 0 0
25.6410255432 14 1 35 1 0 0 0
12.5 16 0 31 1 0 0 0
38.4615402222 14 0 44 1 0 0 0
24.0384616852 14 1 41 1 0 0 0
34.1880340576 16 0 46 1 0 0 0
38.4615402222 14 1 45 1 0 0 0
10.2564105988 13 0 24 1 0 0 0
14.4230766296 12 1 59 1 0 0 0
15.3846149445 12 0 57 1 0 0 0
34.1346168518 14 1 33 1 0 0 0
10.8173074722 14 1 41 1 0 0 0
10.096154213 12 0 44 1 0 0 0
22.5961532593 19 0 39 1 0 0 0
9.3406591415 12 1 52 1 0 0 0
12.5 14 0 52 1 0 0 0
10 13 1 34 1 0 0 0
10.5 13 0 37 1 0 0 0
14.890171051 13 1 37 1 0 0 0
60.0961532593 13 1 43 1 0 0 0
11.2179489136 12 1 42 1 0 0 0
24.0384616852 12 0 43 1 0 0 0
11.6230773926 12 1 64 1 0 0 0
12.9355773926 16 0 56 1 0 0 0
21.5705127716 18 0 51 1 0 0 0
24.6153850555 16 0 54 1 0 0 0
19.7916660309 13 0 36 1 0 0 0
21.1538467407 16 1 49 1 0 0 0
19.059135437 12 1 50 1 0 0 0
23.5576915741 16 1 50 1 0 0 0
19.5804195404 18 0 41 1 0 0 0
25 12 0 21 1 0 0 0
12.0192308426 13 0 30 1 0 0 0
16.3461532593 13 1 43 1 0 0 0
7.5128207207 16 1 62 1 0 0 0
7.6923074722 12 0 23 1 0 0 0
14.6853151321 16 1 53 1 0 0 0
2.4038462639 12 0 58 1 0 0 0
4.5673074722 13 0 27 1 0 0 0
14.4230766296 18 1 25 1 0 0 0
55.3846168518 14 0 41 1 0 0 0
11.1888113022 13 0 56 1 0 0 0
12.0192308426 13 1 35 1 0 0 0
6.4497041702 12 0Documentation for CPS Data Used in Chapter 8
Each month the Bureau of Labor Statistics in the U.S. Department of Labor conducts the “Current Population Survey” (CPS), which provides data on labor force characteristics of the population, including the level of employment, unemployment, and earnings. Approximately 65,000 randomly selected U.S. households are surveyed each month. The sample is chosen by randomly selecting addresses from a database comprised of addresses from the most recent decennial census augmented with data on new housing units constructed after the last census. The exact random sampling scheme is rather complicated (first small geographical areas are randomly selected, then housing units within these areas randomly selected); details can be found in the Handbook of Labor Statistics and is described on the Bureau of Labor Statistics website (www.bls.gov).
The survey conducted each March is more detailed than in other months and asks questions about earnings during the previous year. These data are from the March 2009 survey.
Series in Data Set:
Female
1 if female; 0 if male
Age
Age (in Years)
Ahe
Average Hourly Earnings in 2004
Yrseduc
Years of Education
Northeast
1 if from the Northeast, 0 otherwise
Midwest
1 if from the Midwest, 0 otherwise
South
1 if from the South, 0 otherwise
West
1 if from the West, 0 otherwise
