answer all the question
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Instructions
You must use STATA and must turn in a copy of your Do-file. The Do-file must
perform every task below neatly and correctly.
The work you hand in must be your own. You must NOT copy any answers from
anyone or anywhere else. Please review FIU’s policy on academic misconduct for
more information.
Questions
1. The data for this question can be downloaded here. Consider the following
regression equation:
sat^=1,028.1+19.3hsize?2.18hsize2?45.09female?169.81black+62.31fem
ale?black+e (6.29)(3.83)(0.53)(4.29)(12.71)(18.15)
The standard error for each parameter estimates is in parenthesis. n=4,137 and
R2=0858.
sat is the combined SAT score
hsize is the size of the student’s high-school graduating class, in hundreds
female is a dummy variable for gender
black is a race binary variable (=1 for blacks, =0 otherwise)
?
a) Is there evidence that hsize2 should be included in the model? Explain.
?
b) What is the optimal high-school graduating class size?
?
c) Holding hszie fixed, what is the estimated difference in SAT scores
between non-black females and non-black males? Is the difference
statistically significant?
?
d) Is there a difference in SAT score between black and non-black males?
If so, what is it?
?
e) Is there a difference in SAT score between black and non-black females?
If so, what is it?
2. The data for this question can be downloaded here. Consider the following
regression equation:
log(salary )=?0+?1 years +?2 gamesyr +?3 bavg +?4 hrunsyr +?5 rbisyr +?6 ru
nsyr +?7 fldperc +?8 allstar +?9 frstbase +?10 scndbase +?11 thrdbase +?12 shr
tstop +?13 catcher +e,
The model above explains MLB player salary by position. Outfield is the base
group.
a) State the null hypothesis that catchers and outfielders earn -on average- the
same amount, while controlling for other factors.
b) Test the hypothesis from (2.a) using the supplied dataset, and comment on the
difference in salary.
c) State and test the null hypothesis that there is no average salary across positions
(when all other factors are controlled for)
d) Are the results from (2.a), (2.b), and (2.c) consistent? Explain why or why not.
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