6.1. By equation (6.15) in the text, we know Thus, that values of R? are 0.162, 0.180, end 0.181 for columns (1)-(). 6.2. (a) Workers with college degrees earn $8.31/hour more, on average, than workers with only high school degrees. (b) Men eam $3.85/hour more, on average, than women. 6.3. (a) On average, a worker eams $0.51/hour more for each year he ages. (b) Sally’s earnings prediction is 1.8748.321—3.81x14+0.51x29=21.17 dollars per hour. Betsy’s earnings prediction is 1.87 48.32x1—3.81x1~0.51x34= 23.72 dollars per hour. The differeace is $2.55/hour.6.4. (2) Workers in the Northeast earn $0.18 more per hour than workers in the West, on average, controlling for other variables in the regression. Workers :n the Midwest eam $1.23 less per hcur than workers in the West, on average, conrolling for other variables in the regression. Workers in the South earn $0.43 kss than workers in the West, controlling for other veriables in the regressien () The regiessor Wesris omitted to avoid perfect multicollinearity. If West is included, then the intercept can be writtenas a perfect linear function of the four regional regressors (©) The expected difference in eamings between Juanita and Jennifer is ~0.43 -(-12 $0.86/hour 66. (2) There are other important determinants of a country’s crime rate, including demographic charactatisties of the population (2) Suppose that the crine rate is positively affected by the fraction cf young males in the population, aud that counties with high crime rates tend to hire more police. In this case, ‘he size of the police force is likely to be posiiively correlated with the fraction of young males in the population leading to a positive value for the omitted variable biasso that # > f.. 6.9. For omitted variable bias to occur, two conditions must be true: X, (the included -egressor) is correlateé with the omitted variable, and the omitted variable is a determinant of the dependent variable. Since X, and X, are uncorre ated, the astimator of B, does not suffer from omitted variable bias