Name (Last, First) _________________________________________ Email ID: ____________________@psu.edu ECON 306 Homework 4 Due: Tuesday, October 25, 2016 Instructions: Please print out and complete the following assignment writing your answers clearly and showing your work directly on the assignment. Please keep a log of your work in STATA and print out and attach all of your results. Use a highlighter to highlight all of your commands in STATA (this will make it easier for the graders to see your work). Follow directions carefully (underlining or circling where indicated in your STATA output). Be sure to turn the assignment in at the beginning of class on Tuesday, October 25. Late homeworks cannot be accepted. 1 (15 points total. 5 parts worth 3 points each.) With this assignment you will find an Excel file called HW4.GPA.xls. For reference, the variables in this file include: colGPA = college GPA hsGPA = high school GPA skipped = average lectures missed per week a Run the following regression: colGPA = 0+1*hsGPA b What is the interpretation of the coefficient on hsGPA? (Be specific using the number shown in the STATA output) c Hypothesize the sign of the bias, if any, resulting from excluding skipped from the regression. Explain your reasoning. d Use STATA to verify (or not) your claim from c). Explain using your STATA output to prove this. e Break down the bias into the component pieces (as we did in class) using actual numbers. [Hint you should be running the \"shadow regression\" to determine the value of ]. Highlight any commands that you use in STATA. 2. (5 points) Suppose you are looking at data on determinants of minutes of sleep that people get each night. The data includes a dummy variable called YNGKID to designate if an individual has a young child (1=has a young child, 0=no young child) as well as a variable called TOTWRK which is the number of minutes a person works per week. Using this information, you calculate the following model: SLEEP = 3588.067 - 13.822*YNGKID - 0.151*TOTWRK In the space below, draw two curves that show the relationship between sleep and total hours worked for both people with young kids and those without young kids. The graph does not need to be drawn to scale; just be sure to label the yintercepts, the slopes, and which curve represents someone with a young child and someone without a young child: Sleep Total Work 3. (10 points total. 5 parts worth 2 points each.) With this assignment you will find an Excel file called HW4.Wage.xls. For reference, the variables in this file include: wage = average hourly earnings female = 1 if individual is female married = 1 if individual is married a. Run the following regression: wage = 0 + 1*female + 2*married Report the values for the coefficients: 0 1 2 b. Assuming they are not married, do men or women make more money? How much more? c. Run the same regression as above, but this time include the interaction term for female*married (3). Report the values for the coefficients: 0 1 2 3 d. What are the average hourly earnings for married women? e. What are the average hourly earnings for married men? colGPA hsGPA 3 3.4 3 3.5 3.6 3 2.7 2.7 2.7 3.8 2.8 2.9 3 2.9 3.3 2.6 2.5 2.5 2.4 3.6 2.6 2.7 2.9 3 3.3 3.1 3 3.2 3 3.4 2.9 3.5 3.7 3.5 2.8 2.5 3.1 3.5 3.4 3.5 2.6 2.8 2.6 3.5 4 3.8 2.8 skipped 3 3.2 3.6 3.5 3.9 3.4 3.5 3 3 4 3 3.1 3.5 3.8 3.7 3 3.5 3 3 3.5 3.5 3 3.6 4 3.6 3.3 3.6 3.1 3.4 3.7 3.7 3.3 3.3 3.5 3.2 3.3 3.4 3.5 3.4 3.7 2.5 3.7 3 3 4 3.8 3 2 0 0 0 0 0 0 3 2 0.5 2 1 0 3 1 3 4 5 2 1 3 1 1 0 2 1 2 1 0 0.5 1 1 0 0 1 1 0.5 1 0.5 0 1 0 2 1 0 1 4 3.5 3 2.6 3 3.7 3 2.9 2.6 3 3.3 2.7 3 3.2 2.7 3.6 2.4 2.9 3.3 3.5 3 3 2.8 2.9 3.8 2.5 3 3.2 2.2 3.4 2.9 3.7 2.9 2.8 3.2 3.4 3 2.5 3.5 3.1 2.8 2.9 2.9 3.4 3.4 3.6 3.2 3.2 2.8 3.7 3.4 2.4 3.8 4 3.5 3.4 3.6 3.2 3.8 3.3 3.4 3 3.6 3.9 3 3 3.3 3.3 3.2 3.4 3.7 3.4 3.9 3.6 4 3.6 3 2.8 3.2 2.9 2.9 3.6 3.4 3.6 3.2 3.2 3.2 3.7 2.9 3.3 3.1 3.5 3.5 3.7 3 3.8 3.3 1 2 1 1 1 0 1 1 2 0.5 2 0 0 1 1 2 1 1 0.5 2 0 0 0 2 2 1 1 0 0 0 1 1 0.5 1 0.5 2 2 1 1 0 1 2 0 0 3 0.25 1 0 3.1 2.8 3.4 2.7 3 2.5 2.5 2.7 3.6 2.9 2.8 3.9 2.8 3.9 3.2 3.3 3.3 3.2 3.1 3 3.4 3.1 3.2 3.3 3 2.8 2.8 2.7 2.6 2.9 3 3 2.9 3.3 2.7 3 2.9 3.8 2.9 3 3.2 3 2.3 2.8 3.4 2.8 3.6 3.2 3.6 3.5 3.7 2.7 3.1 3.4 3.3 3.4 3.5 3.9 3.5 4 2.9 3.3 3.5 3.5 3.1 3.1 3.7 3.3 3.7 3 3.8 3.5 3.6 3.5 3 3.8 3.5 3.6 3.8 3.6 3.3 3.2 3.3 3.6 3.8 3.3 3.2 3.3 3.6 3.4 3.7 3.3 0 1 3 0 0 0.5 1 1 0 1 1 0 2 0 1 2 2 0 0 1 5 2 2 0 1 1 3 4 1 1 2 0 2 0 1 1 2 0 0 0 0 0 1 0 3 3 wage 3.1 3.24 3 6 5.3 8.75 11.25 5 3.6 18.18 6.25 8.13 8.77 5.5 22.2 17.33 7.5 10.63 3.6 4.5 6.88 8.48 6.33 0.53 6 9.56 7.78 12.5 12.5 3.25 13 4.5 9.68 5 4.68 4.27 6.15 3.51 3 6.25 7.81 10 4.5 4 6.38 13.7 1.67 educ female 11 12 11 8 12 16 18 12 12 17 16 13 12 12 12 16 12 13 12 12 12 12 16 12 11 16 16 16 15 8 14 14 13 12 12 16 12 4 14 12 12 12 14 11 13 15 10 married 1 1 0 0 0 0 0 1 1 0 1 1 0 0 0 0 1 1 1 1 1 0 1 1 1 0 0 0 0 1 0 1 1 1 1 1 1 0 1 1 1 1 1 1 1 0 0 0 1 0 1 1 1 0 0 0 1 0 0 1 0 1 1 1 0 1 1 0 1 0 0 0 1 1 1 1 1 1 0 0 0 0 1 1 1 1 0 1 1 1 1 0 1 0 2.93 3.65 2.9 1.63 8.6 5 6 2.5 3.25 3.4 10 21.63 4.38 11.71 12.39 6.25 3.71 7.78 19.98 6.25 10 5.71 2 5.71 13.08 4.91 2.91 3.75 11.9 4 3.1 8.45 7.14 4.5 4.65 2.9 6.67 3.5 3.26 3.25 8 9.85 7.5 5.91 11.76 3 4.81 6.5 12 14 12 12 16 12 12 12 15 16 8 18 16 13 14 10 10 14 14 16 12 16 12 16 17 12 12 12 13 12 12 12 18 9 16 10 12 12 12 12 12 8 12 12 14 12 12 12 1 0 1 1 1 0 0 0 0 1 0 1 0 1 0 0 1 0 0 1 0 0 1 1 0 0 1 1 0 1 1 0 0 0 0 1 0 1 1 1 1 0 0 0 0 1 1 1 1 0 1 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 0 0 1 1 1 1 1 1 0 1 1 1 0 0 0 0 1 1 0 1 1 1 1 0 0 0 4 3.5 13.16 4.25 3.5 5.13 3.75 4.5 7.63 15 6.85 13.33 6.67 2.53 9.8 3.37 24.98 5.4 6.11 4.2 3.75 3.5 3.64 3.8 3 5 4.63 3 3.2 3.91 6.43 5.48 1.5 2.9 5 8.92 5 3.52 2.9 4.5 2.25 5 10 3.75 10 10.95 7.9 4.72 9 13 12 14 12 15 12 12 12 14 15 12 12 12 17 11 18 12 14 14 10 14 12 15 8 16 14 15 12 18 16 10 8 10 11 18 15 12 11 12 12 14 16 2 14 16 12 12 1 0 0 0 0 1 1 1 1 0 1 0 0 1 0 0 0 0 0 1 0 1 0 0 1 1 1 0 1 0 1 1 0 1 0 0 0 0 1 0 1 0 0 0 1 0 0 1 1 0 1 1 0 0 1 1 0 1 1 1 0 0 1 1 1 1 1 1 0 1 0 1 1 1 1 0 0 1 1 1 0 0 1 1 0 1 0 1 0 1 1 1 1 1 0 0 5.84 3.83 3.2 2 4.5 11.55 2.14 2.38 3.75 5.52 6.5 3.1 10 6.63 10 2.31 6.88 2.83 3.13 8 4.5 8.65 2 4.75 6.25 6 15.38 14.58 12.5 5.25 2.17 7.14 6.22 9 10 5.77 4 8.75 6.53 7.6 5 5 21.86 8.64 3.3 4.44 4.55 3.5 13 12 15 10 12 16 13 9 12 13 12 12 14 16 16 9 18 10 10 13 12 18 13 12 13 13 13 18 12 12 13 12 12 12 14 10 12 16 16 12 14 12 12 12 12 12 12 12 1 1 1 1 1 1 1 0 0 0 1 1 0 0 0 1 0 0 1 0 1 1 1 1 1 0 0 1 0 1 1 1 1 1 0 0 1 0 1 1 0 1 0 0 0 0 0 1 1 0 0 0 1 1 1 0 0 0 1 0 1 1 1 0 0 0 0 1 1 0 0 1 1 1 1 0 0 1 0 0 1 1 1 1 1 1 0 0 0 0 1 1 1 0 1 1 6.25 3.85 6.18 2.91 6.25 6.25 9.05 10 11.11 6.88 8.75 10 3.05 3 5.8 4.1 8 6.15 2.7 2.75 3 3 7.36 7.5 3.5 8.1 3.75 3.25 5.83 3.5 3.33 4 3.5 6.25 2.95 5.71 3 22.86 9 8.33 3 5.75 6.76 10 3 3.5 3.25 4 16 16 14 11 16 12 12 17 12 12 16 8 12 12 12 16 12 12 9 13 16 14 8 14 13 12 18 9 8 8 12 14 12 16 8 13 9 16 12 15 11 14 12 12 12 18 12 12 0 0 1 1 1 1 0 0 0 0 0 0 1 1 1 1 0 1 1 1 1 1 0 0 0 1 0 0 1 0 1 1 1 0 1 1 1 0 0 0 0 0 0 0 0 1 0 1 1 1 1 0 0 1 1 1 1 1 0 1 1 1 1 1 1 0 0 0 1 0 1 1 0 1 0 1 1 0 1 0 1 1 1 1 0 1 1 1 0 1 1 1 0 0 0 0 2.92 3.06 3.2 4.75 3 18.16 3.5 4.11 1.96 4.29 3 6.45 5.2 4.5 3.88 3.45 10.91 4.1 3 5.9 18 4 3 3.55 3 8.75 2.9 6.26 3.5 4.6 6 2.89 5.58 4 6 4.5 2.92 4.33 18.89 4.28 4.57 6.25 2.95 8.75 8.5 3.75 3.15 5 12 12 12 12 14 16 12 14 11 12 10 12 6 13 12 10 12 14 13 12 18 12 12 12 12 12 8 13 13 14 12 10 16 12 16 12 14 18 17 13 14 15 14 12 8 12 12 8 1 1 1 0 1 0 1 0 1 1 0 0 0 1 0 1 0 1 0 0 1 0 0 1 1 0 1 1 1 1 0 1 0 1 0 1 0 0 0 1 1 1 0 0 0 1 0 0 0 0 1 1 1 1 0 0 0 0 0 1 1 0 1 0 0 1 0 1 0 0 0 1 1 1 0 1 0 1 0 0 1 1 0 0 0 0 1 0 1 1 1 0 0 1 1 0 6.46 2 4.79 5.78 3.18 4.68 4.1 2.91 6 3.6 3.95 7 3 6.08 8.63 3 3.75 2.9 3 6.25 3.5 3 3.24 8.02 3.33 5.25 6.25 3.5 2.95 3 4.69 3.73 4 4 2.9 3.05 5.05 13.95 18.16 6.25 5.25 4.79 3.35 3 8.43 5.7 11.98 3.5 12 9 12 16 12 16 12 12 13 10 6 12 12 16 12 8 12 6 4 11 11 7 12 18 12 16 12 14 12 10 10 9 10 12 12 12 10 16 16 16 12 12 7 8 16 16 18 13 0 0 0 0 1 1 1 0 0 1 0 0 1 0 0 0 1 0 0 0 1 1 1 1 1 0 0 0 0 1 0 1 0 1 1 1 1 0 0 0 0 1 1 0 0 0 0 1 1 0 1 1 1 0 0 1 1 1 1 1 1 0 1 1 1 1 1 1 0 0 1 1 1 0 1 1 0 1 0 0 1 1 1 0 0 1 1 0 0 1 0 1 1 0 1 1 4.24 7 6 12.22 4.5 3 2.9 15 4 5.25 4 3.3 5.05 3.58 5 4.57 12.5 3.45 4.63 10 2.92 4.51 6.5 7.5 3.54 4.2 3.51 4.5 3.35 2.91 5.25 4.05 3.75 3.4 3 6.29 2.54 4.5 3.13 6.36 4.68 6.8 8.53 4.17 3.75 11.1 3.26 9.13 10 16 14 16 12 9 11 11 12 11 12 12 12 12 14 14 18 12 12 12 11 12 17 16 13 13 12 14 14 11 10 8 14 12 10 17 9 12 12 14 16 12 10 0 14 15 16 12 0 1 1 0 0 1 0 0 0 0 0 1 1 0 0 0 0 1 1 0 1 0 0 0 1 1 1 0 1 0 0 0 1 1 1 0 1 1 1 0 0 0 0 1 1 1 1 0 1 1 1 0 1 1 0 1 1 1 1 1 1 0 1 1 0 1 0 1 0 0 1 1 1 1 1 1 1 0 1 1 1 1 0 1 0 1 1 1 0 1 1 0 1 0 1 1 4.5 3 8.75 4.14 2.87 3.35 6.08 3 4.2 5.6 10 12.5 3.76 3.1 4.29 10.92 7.5 4.05 4.65 5 2.9 8 8.43 2.92 6.25 6.25 5.11 4 4.44 6.88 5.43 3 2.9 6.25 4.34 3.25 7.26 6.35 5.63 8.75 3.2 3 3 12.5 2.88 3.35 6.5 10.38 11 11 12 13 12 13 16 15 16 15 12 18 6 6 12 12 16 9 12 11 10 12 8 9 17 16 11 10 8 13 14 13 11 7 16 12 13 14 16 14 11 8 14 17 10 12 12 18 0 1 0 1 1 1 0 0 1 1 0 0 0 1 1 0 1 1 0 0 1 1 0 1 1 1 0 1 0 0 0 1 1 0 1 1 0 1 0 0 0 1 1 0 1 0 0 0 1 0 1 1 1 0 0 0 1 0 1 1 0 0 1 1 1 1 1 1 1 0 1 0 0 1 0 0 1 1 1 0 0 1 0 1 0 1 1 1 0 1 1 1 0 1 1 1 4.5 10 3.81 8.8 9.42 6.33 4 2.9 20 11.25 3.5 6 14.38 6.36 3.55 3 4.5 6.63 9.3 3 3.25 1.5 5.9 8 2.9 3.29 6.5 4 6 4.08 3.75 3.05 3.5 2.92 4.5 3.35 5.95 8 3 5 5.5 2.65 3 4.5 17.5 8.18 9.09 11.82 14 18 12 16 14 12 9 12 12 17 12 15 17 16 12 15 16 12 15 12 12 12 12 16 11 14 14 13 14 12 12 8 12 3 11 15 11 12 4 9 12 12 11 12 16 13 15 16 0 0 1 0 1 0 0 1 0 0 1 1 0 0 1 0 0 1 0 1 1 1 1 0 1 0 0 1 0 1 1 1 1 0 0 1 0 0 0 0 0 1 1 1 0 0 0 0 1 0 1 1 1 1 0 1 1 1 0 1 1 1 1 1 1 0 1 1 0 1 1 0 0 0 1 0 1 1 1 0 1 0 0 1 1 1 1 1 1 1 0 1 1 0 1 1 3.25 4.5 4.5 3.71 6.5 2.9 5.6 2.23 5 8.33 2.9 6.25 4.55 3.28 2.3 3.3 3.15 12.5 5.15 3.13 7.25 2.9 1.75 2.89 2.9 17.71 6.25 2.6 6.63 3.5 6.5 3 4.38 10 4.95 9 1.43 3.08 9.33 7.5 4.75 5.65 15 2.27 4.67 11.56 3.5 12 12 12 9 10 12 11 8 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