Using the data in KIELMC.RAW, the following equations were estimated using the years 1978 and 1981: And

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Using the data in KIELMC.RAW, the following equations were estimated using the years 1978 and 1981:

And

Compare the estimates on the interaction term y81-nearinc with those from equation (13.9). Why are the estimates so different?

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Introductory Econometrics A Modern Approach

ISBN: 978-0324660548

4th edition

Authors: Jeffrey M. Wooldridge

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Question Posted: Apr 21, 2016 04:57 AM

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Using the data in KIELMC.RAW, the following equations were estimated using the years 1978 and 1981: And

Question:

log(price) 11.49-.547 nearinc +.394 y8 nearnc (.26) 058) 321, R220 (.080) log(price) 11.18 + .563 y8 -403 y81 nearinc (.27) (.044) (067) 321, R337

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The first equation omits the 1981 year dummy variable y81 and so does not allow any appreci...View the full answer

Introductory Econometrics A Modern Approach

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