The data file HW1 contains data for full-time, full-year workers, age 25-34, with a high school diploma or B.A./B.S. as their highest degree. A detailed description of the dataset and the dataset are provided under FILES> Homework > HW1. investigate the relationship between a worker's age and earnings. Please keep in mind that generally, older workers have more job experience, leading to higher productivity and earnings.

a) Provide a scatterplot with average hourly earnings on the vertical axis and age on the horizontal axis.

*** a. ***

scatter ahe age

*** b. ***

regress ahe age

// intercept: 4.62605; slope: 0.5118171 //

b) Run a regression of average hourly earnings (AHE) on age (Age). What is the estimated intercept? What is the estimated slope? How much do earnings increase as workers age by 1 year?

intercept: 4.62605; slope: 0.5118171

I think the earnings increase as workers aged by 1yr should be the same value as the value of slope which is 0.5118171.

c) Mary is a 26-year-old worker. Predict Mary's earnings using the estimated regression. Patrick is a 30-year-old worker. Predict Patrick's earnings using the estimated regression.

plugin the value of mary and patrick age.

mary:4.62605+0.5118171*26=17.9332946

patrick:4.62605+0.5118171*30=19.980563

so mary earns 17.9332946 and patrick earns 19.980563

d) Does age account for a large fraction of the variance in earnings across individuals? Explain.

no, cuz R2 is too small, the regression only explain 0.0185 of the sample data.

e) Is the estimated regression slope coefficient statistically significant? Make sure you present all the steps for full credit.

... Saplin x @ (376) x > Syllabappor x UCILE X C Search x C Consi x C 2) (Co x * Search x # Scatte x + nc-hyperstream.apporto.com/hyperstream/#/client/MTI4Mjg1NTKAYwBlbmNyeXBOZWR1cmwtamRiYw==?q=IELxPh1Kmyx4Z9... ()) Time 00:08:36 Activity Stata/MP 16.1 - \\\\apporto.com\\dfs\\UCl\\Users\\syuwei_uci\\Downloads\\HW1 (1).dta 0 X File Edit Data Graphics Statistics User Window Help History 2. More than 2 billion observations are allowed; see help obs_advice. Variables TIX Filter commands here 3. Maximum number of variables is set to 5,000; see help set_maxvar. Filter variables here # Command rc Running C:\\Program Files\\Stata16\\profile. do . . . Name Label use "\\\\apporto.com\\dfs\\UCN\\Users\\... year . use "\\\\apporto. com\\dfs\\UCI\\Users\\syuwei_uci\\Downloads \\HW1 (1) .dta" E..... 2 * * * a * * * ahe 3 scatter ahe age bachelor 4 * * * 1. * * * female 5 regress ahe age scatter ahe age age // intercept: 4.62605; slope: 0.51181... 199 regress ahe age Source SS df MS Number of obs 7, 440 F (1, 7438) 140.18 Model 15713.6505 1 15713.6505 Prob > F 0.0000 Residual 833801.332 7, 438 112.100206 R-squared 0. 0185 Properties q X Adj R-squared 0.0184 11 Total 849514.982 7, 439 114.19747 Root MSE 10.588 Variables Name ahe Coef. Std. Err. t P>/t/ [95% Conf. Interval] Label Type age . 5118171 . 0432294 11.84 0.000 . 4270752 .596559 Format cons 4.62605 1. 287518 3.59 0.000 2. 102149 7.14995 Value label Notes Data // intercept: 4.62605; slope: 0.5118171 // . . Frame default D Filename HW1 (1).dta Label Command Notes Variables 5 CAP NUM OVR 6:20 PM Ho em 4/16/2021Source SS d f MS Number of obs = 7,440 F (1, 7438) 140 . 18 Model 15713 . 6505 1 15713 . 6505 Prob > F 0. 0600 Residual 833801.332 7,438 112.100206 R-squared = 0 . 0185 Adj R-squared 0 . 0184 Total 849514. 982 7,439 114. 19747 Root MSE = 10 .588 ahe Coef. Std. Err. t P> It| [95% Conf. Interval] age . 5118171 . 0432294 11 . 84 0.090 . 4270752 . 596559 _Cons 4. 62605 1. 287518 3.59 0.000 2. 102149 7. 14995