Estimate the model covered in class by OLS and 2SLS but replace education by the following...

Transcribed Image Text:

Estimate the model covered in class by OLS and 2SLS but replace education by the following dummy D = {0,1} where D = 1 if education > 12. (You need the following packages for this question: ivreg, sandwich, Imtest, nlWaldTest.) i) What are the estimates of the coefficient of D by OLS and 2SLS? What are their robust standard errors? Are they significant at 5% level? ii) For 2SLS, test the the joint hypothesis Ho: Beducation = 0 and Bexperience +12ßexperience = 0 by command "nlWaldtest". You need to obtain the robust covariance matrix first by vcovHC. Estimate the model covered in class by OLS and 2SLS but replace education by the following dummy D = {0,1} where D = 1 if education > 12. (You need the following packages for this question: ivreg, sandwich, Imtest, nlWaldTest.) i) What are the estimates of the coefficient of D by OLS and 2SLS? What are their robust standard errors? Are they significant at 5% level? ii) For 2SLS, test the the joint hypothesis Ho: Beducation = 0 and Bexperience +12ßexperience = 0 by command "nlWaldtest". You need to obtain the robust covariance matrix first by vcovHC.

Answer rating: 100% (QA)

Solution The current in the resist... View the full answer