PRCTICA I de ECONOMETRA I

Prof. Darwin Ugarte Ontiveros

Tema 1: Introduccin a la Econometra

1) Provided the structure of he following model Y=a+bX+u, provide one example of model for each of the following cases. a) Y is a dummy, b) Y is an ordinal categorical variable, c) Y is nonordinal categorical variable, d) Y is a count variable, e) Y is truncated, f) Y is censored, g) a selection model, and h) a survival model 2) Imagine (design) a research project following the steps discussed in class for pursuing an empirical economic work. 3) A random variable X is defined to be the difference between the higher value and the lower value when two dice are thrown. If they have the same value, X is defined to be zero. a) Find the probability distribution for X. b) Find the expected value of X ,c) Calculate E(X2) d) Calculate the population variance and the standard deviation of X e) Using the alternative definition of variance, find the variance of the random variable X 4)

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15) A researcher is evaluating whether an increase in the minimum hourly wage has had an effect on employment in manufacturing industry in the following three months. Taking a sample of 25 firms, what should she conclude if (a) the mean decrease in employment is 9 percent, and the standard error of the mean is 5 percent (b) the mean decrease is 12 percent, and the standard error is 5 percent (c) the mean decrease is 20 percent, and the standard error is 5 percent (d) there is a mean increase of 10 percent, and the standard error is 5 percent? (e) Determine the 95 percent confidence interval for the effect of an increase in the minimum wage on employment, for each part of the exercise. How do these confidence intervals relate to the results of the t tests in that exercise?

Tema 2: Anlisis de regresion simple

1) Consider the case where X is some nonzero constant value for all observations, and then consider the case where this constant value is zero. Using the normal equations explain what happens with the coefficients 1 and 2. Give also a graphical explanation of the problem. 2)

3) Does educational attainment depend on intellectual ability? In the United States, as in most countries, there is a positive correlation between educational attainment and cognitive ability. S (highest grade completed by 2002) is the number of years of schooling of the respondent. ASVABC is a composite measure of numerical and verbal ability with mean 50 and standard deviation 10. Provided the following output from a regression of S on ASVABC interpret the regression results

4) The output shows the result of regressing the number of children in the family on the years of schooling of the mother. Provide an interpretation of the model.

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18) Calculate the 95 percent confidence interval for the slope coefficient, and the F-statistic in exercises 3, 4, and 7.