The Stata output shown here uses historical data on a random sample of 353 major league...
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The Stata output shown here uses historical data on a random sample of 353 major league baseball (MLB) players. Refer to this output to answer Part 2, Question 2, A-D. The variables are: salary is a player's current annual salary in dollars • gamesyr is the average number of games played per year by the player while in the league gen insalary in (salary) reg Insalary gamesyr Source I SS Model | 275.434717 Residual I 216.740819 Total I 492.175535 current season salary (3) 0000009 insalary I gamesyr | cons scatter salary gamesyr 000000 0000000 0244816 11.28698 df Coef. Std. Err. 1 351 352 0011592 1124788 100 games per year in league MS 275.434717 .61749521 1.39822595 t Number of obs F(1, 351) Prob > F R-squared 150 Adj R-squared Root MSE p>It| 21.12 0.000 100.35 0.000 353 446.05 0.0000 0.5596 0.5584 .78581 [95% Conf. Interval) 0267614 11.50819 0222018 11.06576 Part 2, Question 2. All parts of this question refer to the Stata output for Part 2, Question 2 on "MLB Salaries." For calculations, you may receive partial credit if you show your work. A. Write a verbal interpretation of the estimate of 0.0244816 in the "coef." column of the regression table in the row labelled "gamesyr". Assume that all of the assumptions of the Simple Linear Regression model are valid. What does this estimate represent? Be as specific as possible and be sure to state the units. B. Consider the meaning and validity of the "Zero Conditional Mean (ZCM)" assumption (i.e., the assumption that E (ulx) = 0) in the regression model: Insalary =B₁ + B, gamesyr + u • First, provide a verbal interpretation of the assumption in this particular application. (What does it mean in words?) • Do you think the ZCM assumption is likely to be valid in this context? Briefly explain why or why not (1 sentence or counter example is fine). C. Briefly explain the purpose of the command: gen insalary = In (salary) and provide a rationale for using Insalary instead of salary as the dependent variable in this model. Refer to any output that is relevant to support your argument. D. Suppose instead of gamesyr, we ran the regression of Insalary on gamesmo, defined as average games played per month while in the league and constructed as: gen gamesmo = gamesyr/12 • What would be the OLS coefficient on gamesmo produced by this regression? • What would be the OLS intercept estimate , from this regression? The Stata output shown here uses historical data on a random sample of 353 major league baseball (MLB) players. Refer to this output to answer Part 2, Question 2, A-D. The variables are: salary is a player's current annual salary in dollars • gamesyr is the average number of games played per year by the player while in the league gen insalary in (salary) reg Insalary gamesyr Source I SS Model | 275.434717 Residual I 216.740819 Total I 492.175535 current season salary (3) 0000009 insalary I gamesyr | cons scatter salary gamesyr 000000 0000000 0244816 11.28698 df Coef. Std. Err. 1 351 352 0011592 1124788 100 games per year in league MS 275.434717 .61749521 1.39822595 t Number of obs F(1, 351) Prob > F R-squared 150 Adj R-squared Root MSE p>It| 21.12 0.000 100.35 0.000 353 446.05 0.0000 0.5596 0.5584 .78581 [95% Conf. Interval) 0267614 11.50819 0222018 11.06576 Part 2, Question 2. All parts of this question refer to the Stata output for Part 2, Question 2 on "MLB Salaries." For calculations, you may receive partial credit if you show your work. A. Write a verbal interpretation of the estimate of 0.0244816 in the "coef." column of the regression table in the row labelled "gamesyr". Assume that all of the assumptions of the Simple Linear Regression model are valid. What does this estimate represent? Be as specific as possible and be sure to state the units. B. Consider the meaning and validity of the "Zero Conditional Mean (ZCM)" assumption (i.e., the assumption that E (ulx) = 0) in the regression model: Insalary =B₁ + B, gamesyr + u • First, provide a verbal interpretation of the assumption in this particular application. (What does it mean in words?) • Do you think the ZCM assumption is likely to be valid in this context? Briefly explain why or why not (1 sentence or counter example is fine). C. Briefly explain the purpose of the command: gen insalary = In (salary) and provide a rationale for using Insalary instead of salary as the dependent variable in this model. Refer to any output that is relevant to support your argument. D. Suppose instead of gamesyr, we ran the regression of Insalary on gamesmo, defined as average games played per month while in the league and constructed as: gen gamesmo = gamesyr/12 • What would be the OLS coefficient on gamesmo produced by this regression? • What would be the OLS intercept estimate , from this regression?
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A The estimate of 00244816 in the coef column of the regression table in the row labeled gamesyr rep... View the full answer
Related Book For
Essentials Of Statistics For Business And Economics
ISBN: 9781305081598
7th Edition
Authors: David Anderson, Thomas Williams, Dennis Sweeney, Jeffrey Cam
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