Use the data in DISCRIM.RAW to answer this question. (See also Computer Exercise C3.8 in Chapter 3.)
Question:
(i) Use OLS to estimate the model
log(psoda) = (0 + (1 rpblck + (2 log(income) + fiiprppov + u,
(ii) What is the correlation between log(income) and prppov? Is each variable statistically significant in any case? Report the two-sided p-values.
(iii) To the regression in part (i), add the variable log(hseval). Interpret its coefficient and report the two-sided p-value for H0: (log(hesval) = 0.
(iv) In the regression in part (iii), what happens to the individual statistical significance of log(income) and prppov? Are these variables jointly significant? (Compute a p-value.) What do you make of your answers?
(v) Given the results of the previous regressions, which one would you report as most reliable in determining whether the racial makeup of a zip code influences local fast-food prices?
Step by Step Answer:
Introductory Econometrics A Modern Approach
ISBN: 978-0324660548
4th edition
Authors: Jeffrey M. Wooldridge