Question $4$

A model relating a person$$s wage to observed education and other unobser$-$

ved factors is given by:

wage $=$ $0+$ $1$educ $+$ u

If wage is measured in dollars per hour and educ is years of education, then

$1$ measures:

Ans $4\mathrm{.}1$: The change in education given an increase in the hourly wage.

Ans $4\mathrm{.}2$: The change in education.

Ans $4\mathrm{.}3$: The change in hourly wage given another year of education.

Ans $4\mathrm{.}4$: The change in other variables that are not in the model.

$2$