Question: Please help me with this question! I don't know how to solve it! A researcher wishes to study the relationship between education and income separately
Please help me with this question! I don't know how to solve it!
A researcher wishes to study the relationship between education and income separately for individuals who have college degrees, and for those who don't. To this end, he interviews 100 individuals in each category. Survey results are listed in the table below.
| non college graduates | college graduates | |
|---|---|---|
| avg education | 13 yr | 18 yr |
| std. dev. education | 2 yr | 1.2 yr |
| Sxx | 396 yr2 | 143 yr2 |
| Avg. Income | $67,200 | $84,950 |
| std. dev. income | $9,400 | $10,500 |
| correlation coefficient | .25 | .15 |
a. Use the data above to find point estimates for regression coefficients B0NG and B1NG for non-college graduates and BoG and B1G for college graduates.
b. Propose an unbiased estimator for the difference theta=B1G - B1NG in slope coefficients for the two sub-populations, and show that B(theta hat)= 0.
c. Assume that the error terms ENG and EG for non-graduates and graduates, respectively, are both distributed normally, with known standard deviation oENG = oEG = $
10,000. In that case, determine the standard deviation error of theta hat, along with the shape of its distribution.
d. Using the estimator defined above, and maintaining the assumption oENG = oEG = $10,000, test at the alpha = .05 level whether the slope coefficients, for the two sub-populations differ. State the p-value associated with this hypothesis test.
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