1. You are interested in seeing how a variety of factors affect the happiness of a...

Transcribed Image Text:

1. You are interested in seeing how a variety of factors affect the happiness of a country's citizens. You download the 2017 World Happiness Index from the United Nations and run the following regression of happiness on freedom score (freedom), trust of government score (trustgov), and GDP per capita (gdpcapita). reg happinessscore freedom trustgov gdpcapita Source SS df MS Number of obs = 155 F(3, 151) = 147.41 Model Residual 146.908804 50.1621491 3 151 48.9696015 .332199663 Prob > F = 0.0000 R-squared = 0.7455 Total 197.070954 154 1.27968152 Adj R-squared = Root MSE 0.7404 = .57637 happinesss~e Coef. Std. Err. t P>|t| [95% Conf. Interval] freedom trustgov gdpcapita 2.227434 4422988 cons 1.853005 2.564332 .3680995 .5388779 .1214193 .1519676 6.05 0.000 1.500144 2.954725 15.26 16.87 0.000 0.000 1.613105 2.264074 2.092905 2.864589 (a) (3 points) The United States has a GDP per capita of 1.546, a freedom score of 0.5057, and a trust in government score of 0.1356. What is the predicted happiness score for the United States? (b) (6 points) Test that the partial slope coefficient on trustgov is zero at the 1% significance level. Show your steps. Interpret your conclusion. (c) (6 points) Is a one unit increase in the freedom score associated with a larger than 2 points increase in the happiness index? Show all steps. Use 5% significance level. (d) (2 points) Interpret the confidence interval for gdpcapita. (e) (5 points) Calculate an interpret a 99% confidence interval for the coefficient on freedom. 1. You are interested in seeing how a variety of factors affect the happiness of a country's citizens. You download the 2017 World Happiness Index from the United Nations and run the following regression of happiness on freedom score (freedom), trust of government score (trustgov), and GDP per capita (gdpcapita). reg happinessscore freedom trustgov gdpcapita Source SS df MS Number of obs = 155 F(3, 151) = 147.41 Model Residual 146.908804 50.1621491 3 151 48.9696015 .332199663 Prob > F = 0.0000 R-squared = 0.7455 Total 197.070954 154 1.27968152 Adj R-squared = Root MSE 0.7404 = .57637 happinesss~e Coef. Std. Err. t P>|t| [95% Conf. Interval] freedom trustgov gdpcapita 2.227434 4422988 cons 1.853005 2.564332 .3680995 .5388779 .1214193 .1519676 6.05 0.000 1.500144 2.954725 15.26 16.87 0.000 0.000 1.613105 2.264074 2.092905 2.864589 (a) (3 points) The United States has a GDP per capita of 1.546, a freedom score of 0.5057, and a trust in government score of 0.1356. What is the predicted happiness score for the United States? (b) (6 points) Test that the partial slope coefficient on trustgov is zero at the 1% significance level. Show your steps. Interpret your conclusion. (c) (6 points) Is a one unit increase in the freedom score associated with a larger than 2 points increase in the happiness index? Show all steps. Use 5% significance level. (d) (2 points) Interpret the confidence interval for gdpcapita. (e) (5 points) Calculate an interpret a 99% confidence interval for the coefficient on freedom.