Question: Use the data in WAGE2 for this exercise. (i) Consider the standard wage equation log1wage2 5 b0 1 b1educ 1 b2exper 1 b3tenure 1 u.

Use the data in WAGE2 for this exercise.

(i) Consider the standard wage equation log1wage2 5 b0 1 b1educ 1 b2exper 1 b3tenure 1 u.

State the null hypothesis that another year of general workforce experience has the same effect on log(wage) as another year of tenure with the current employer.

(ii) Test the null hypothesis in part (i) against a two-sided alternative, at the 5% significance level, by constructing a 95% confidence interval. What do you conclude?

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