Use the data in BEAUTY.RAW for this question.

(i) Using the data pooled tor men and women, estimate the equation

And report the results using heteroscedasticity-robust standard errors below coefficients. Are any of the coefficients surprising in either their signs or magnitudes? Is the coefficient on female? Practically large and statistically significant?

(ii) Add interactions of female with all other explanatory variables in the equation from part (i)

(Five interactions in all). Compute the usual F test of joint significance of the five interactions and a heteroscedasticity-robust version. Does using the heteroscedasticity - robust version change the outcome in any important way?

(iii) In the full model with interactions, determine whether those involving the looks variables?

female belavg and female abvavg ?are jointly significant. Are their coefficients practically small?

Transcribed Image Text:

Iwage=B₁ + B belavg + B₂abvavg + Bfemale + Beduc + B₁exper + ß-exper² + u, Iwage=B₁ + B belavg + B₂abvavg + Bfemale + Beduc + B₁exper + ß-exper² + u,

Answer rating: 100% (QA)

i Estimating the equation using heteroscedasticityrobust standard error given by The result is Dependent variable LWAGE Meth od Least Squares Date 100... View the full answer