Question: Suppose data are generated by where E [ u | educ ] = 0 . wagei = beta 0 + beta 1 educi
Suppose data are generated by where Eu educ
wagei beta beta educi ui
i Provide an expression for Ewage educ that references beta and beta Potential Solution: Ewage educbeta beta educ.
ii Suppose an analyst has data from workers with years of education and with years of educa
tion. The analyst calculates the average wage for each group, finding Ewage educ and
Ewage educ Using these estimates, provide an estimate of beta
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