QUESTION 5 Note that this exercise replicates Section 5.3 in Stock and Watson, but with the...
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QUESTION 5 Note that this exercise replicates Section 5.3 in Stock and Watson, but with the MA data instead of CA data. Hence, it would be helpful to read the section once again. Generate a new variable D in R that equals either 0 or 1, depending on whether the student-teacher ratio is less than 17, i.e., i 1 if the student-teacher ratio in ith district < 17 D O if the student-teacher ratio in ith district 17 Estimate the population regression model TestScore = a + a D + e. i 0 1ii where E[e ID]=0. Note that different notations (a a e " 0' 1' 0' 1' u are used instead of (o B.) because the regression model in this question is different from the one in Question 2. What is the OLS estimate for the conditional expectation, E[TestScore | STR <17] Report your answer to two decimal places. QUESTION 5 Note that this exercise replicates Section 5.3 in Stock and Watson, but with the MA data instead of CA data. Hence, it would be helpful to read the section once again. Generate a new variable D in R that equals either 0 or 1, depending on whether the student-teacher ratio is less than 17, i.e., i 1 if the student-teacher ratio in ith district < 17 D O if the student-teacher ratio in ith district 17 Estimate the population regression model TestScore = a + a D + e. i 0 1ii where E[e ID]=0. Note that different notations (a a e " 0' 1' 0' 1' u are used instead of (o B.) because the regression model in this question is different from the one in Question 2. What is the OLS estimate for the conditional expectation, E[TestScore | STR <17] Report your answer to two decimal places.
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