1. Estimate the regression hourswmi = Bo + Bikidcounti + Bzagemli + Bablack; + BAhispan; + Ei by OLS and obtain the heteroskedasticity-robust standard errors using White's Heteroskedasticity consistent standard errors. Interpret the coefficient on kidcount and discuss the statistical significance. 2. Angrist and Evans propose an instrumental variable, samesex, a binary variable equal to one if the first two children are the same biological sex. What do you think is the argument for why it is a relevant instrument for kidcount? Estimate the regression kidcount; = Bo + Bisamesexi + Bzagemli + Bablacki + BAhispani + Ei and see if the reasoning from problem (2) holds. Interpret the coefficient on samesex and comment on statistical significance. Does this appear to be a relevant instrument? Do you think the instrument is exogenous? In other words, can you think of any reason why samesex might be correlated with & in problem (1)? (Note that biological sex can be reasonably assumed to be randomly determined. However, would you expect a family's finances to be affected based on whether they have two children of the same sex or two children of the opposite sex?) Can we test for the exogeneity of samesex by adding it to the regression in problem (1) and testing its significance? Explain