You have obtained a sub-sample of 1744 individuals from the Current Population Survey (CPS) and are...

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You have obtained a sub-sample of 1744 individuals from the Current Population Survey (CPS) and are interested in the relationship between weekly earnings and age. The regression, using heteroskedasticity-robust standard errors, yielded the following result: R² = 0.21 Earn 237 + 4.5 × Age where Earn and Age are measured in dollars per week and years, respectively. a) How do you interpret the slope coefficient being equal to 4.50? b) Interpret the R2 coefficient. c) The average age in this sample is 40 years old. What is average weekly earnings in the sample? d) Earnings usually increase with the number of years of work experience. Experience also gener- ally correlates with age. Does this fact mean that assumption A1 (i.e. E[u|X = x] = 0) is invalid? Explain. = SER = 250 You have obtained a sub-sample of 1744 individuals from the Current Population Survey (CPS) and are interested in the relationship between weekly earnings and age. The regression, using heteroskedasticity-robust standard errors, yielded the following result: R² = 0.21 Earn 237 + 4.5 × Age where Earn and Age are measured in dollars per week and years, respectively. a) How do you interpret the slope coefficient being equal to 4.50? b) Interpret the R2 coefficient. c) The average age in this sample is 40 years old. What is average weekly earnings in the sample? d) Earnings usually increase with the number of years of work experience. Experience also gener- ally correlates with age. Does this fact mean that assumption A1 (i.e. E[u|X = x] = 0) is invalid? Explain. = SER = 250