Hourly Earnings And Unemployment Rate

/in /by

Complete Problem 5.29 of Chapter 5 and submit to your instructor. Complete your assignment in Excel and submit your completed Excel workbook to your Instructor for grading.

5.29. Refer to Example 5.6 in the chapter. It was shown that the percentage change in the index of hourly earnings and the unemployment rate from 1958-1969 followed the traditional Phillips curve model. An updated version of the data, from 1965-2007, can be found in Table 5-19 on the textbook’s Web site.

  1. Create a scattergram using the percentage change in hourly earnings as the Y variable and the unemployment rate as the X variable. Does the graph appear linear?
  2. Now create a scattergram as above, but use 1/X as the independent variable. Does this seem better than the graph in part (a)?
  3. Fit Eq. (5.29) to the new data. Does this model seem to fit well? Also create a regular linear (LIV) model as in Eq. (5.30). Which model is better? Why?

Order a Similar Paper

Principles Of Econometrics

/in /by

The Assignment:

In figure 5-4(c) of our text, the celebrated Phillips curve is depicted.  Discuss its meaning as it relates to wages and unemployment.  Be sure to take advantage of the Tips & Hints and supplemental resources provided.

Respond to at least two of your classmates’ postings.

What Success Looks Like:

Be careful with this one!  This question is deceptively tricky! The question does not ask you to just describe the graph and its axes!  If you merely repeat the definition from the text, you will get minimal credit!  There is much more here and this ties into this week’s Problem Set.  The question does ask you to describe the relation of the variables and the way in which a relationship may be misleading because of the limitations of its sample period… and because the underlying hypothesis was incomplete.  (As a hint, keep in mind that this chapter is about multivariate regression.)

Please be sure to:
1)  Answer the question asked,
2)  Answer all the parts of the question asked,
3)  Proofread your essay for spelling and grammar.

Please note that you will receive the minimum credit (“Below Expectations”) if you merely repeat the definition of the Phillips curve!  We are economists, not parrots!

Discussion 2 addresses a very important concept from economics… which is also often rather misunderstood.  I’ll provide more elaboration on the Philips curve as we progress, but in the meantime:

1) Discuss the meaning of the Philips curve “…as it relates to wages and unemployment.”  What does the Philips curve explain?  And why was it believed to explain it?  It is not enough to simply say that it shows some sort of relationship between wages and unemployment!  You must look deeper!  You need to provide more detail than that.

As a clue, this Week is all about figuring out whether or not you have enough variables or not.  As another clue, the Philips curve as postulated in the 1960s is an example of correlation not being causation!  The trade-off postulated by Philips does not exist!  Why?  Well, back to my clue, maybe there is another variable that should be considered.  This discussion rewards research, on the internet or elsewhere.

The Phillips Curve demonstrates that bad economics can be politically popular… and economically disastrous.  Although American politicians especially took comfort in the Phillips Curve as they attempted to manage employment and inflation in the ’60’s, they were entirely flummoxed when the economy entered “stagflation” in the ’70’s.  In stagflation, unemployment and inflation were both high.  The “misery index” (unemployment rate added to inflation rate) was created to gauge the pain of this situation.  

The inability of the Carter Administration to master this apparent paradox provided Ronald Reagan with some of his most compelling rhetoric and set the stage for President Reagan’s election in 1980.  When I was an undergrad, economists believed that stagflation could only be conquered through a protracted depression or perhaps not at all… probably proving that they were smarter than they were useful.  Interestingly, the limited period examined by the text (as analyzed by the British economist responsible for this eponymous curve) perhaps inadvertently shows how one can reach a flawed conclusion from history if one does not look at enough of the history… and that correlation indeed does not imply causation!

You can watch a splendid animation of the Phillips Curve (Links to an external site.) (Links to an external site.)Links to an external site. as it evolved from 1961 to 1987.  You can also download the slides (Links to an external site.) (Links to an external site.)  (Links to an external site.)Links to an external site.from the corresponding undergraduate macroeconomics lecture at Carnegie Mellon University (just follow the re-direct and you will find yourself at a webpage that will provide you with a variety of interesting options).

– – – – –

Thompson, P. (2011). Inflation and Unemployment. 88-301 Intermediate Economics, CarnegieMellonUniversity. Retrieved on May 8. 2011 from http://www.google.com/imgres?imgurl=http://www.andrew.cmu.edu/course/88-301/phillips/phillips_curve.gif&imgrefurl=http://www.andrew.cmu.edu/course/88-301/phillips/phillips.html&h=300&w=400&sz=50&tbnid=Y2Q9CFtDWRxdMM:&tbnh=93&tbnw=124&prev=/search%3Fq%3Dphillips%2Bcurve%26tbm%3Disch%26tbo%3Du&zoom=1&q=phillips+curve&hl=en&usg=__PStVhW9uxt6jS95Szv49oIcz4OE=&sa=X&ei=fSXHTaDzCaXv0gHtj_GxCA&sqi=2&ved=0CEEQ9QEwAg

 

Order a Similar Paper

corresponding matrices

/in /by

Problem 1: Consider the following two-

variable Blanchard-Quah model:

ptptpttttt ryryrbby  ++++++−= −−−− 12111121111210 …………….

rtptpttttt ryryybbr  ++++++−= −−−− 22211221212110 …………….

Here ty is the nominal interest rate and zr is the ex-ante real interest rate. pt is expected inflation rate

shock and rt is ex-ante real interest rate shock. Assume that te1 and te2 are the error terms of the

reduced-form versions of the above two equations. Consider the VAR(1) version of the above mentioned

model.

(a) Write down a reduced form representation of the model (with its corresponding matrices).

The relationship between te1 and te2 and pt , rt can be represented by the following two equations:

rtptt cce  )0()0( 21111 +=

rtptt cce  )0()0( 22122 +=

Clearly, if we can estimate the four parameters: ),0(),0(),0(),0( 22211211 cccc then we can use the above

two equations to recover the original shocks pt , rt from the estimated reduced-form residuals: te1 , te2 .

 

 

(b) Derive the residuals as functions of the expected inflation shocks pt and real interest rate

shocks rt . What do you have to do to identify the shocks from the residuals in this model?

(c) At least how many restrictions do you need in a VAR model to identify structural shocks from the

residuals? Explain how do you transform the contemporaneous coefficients matrix.

(d) Find the variance-covariance matrix of the reduced-from residuals.

We can write down the moving average representation of ty and zr as follows:

 

= −

= − +=

0 120 11 )()(

k krtk kptt kckcy 

 

= −

= − +=

0 220 21 )()(

k krtk kptt kckcr 

(a) Using the VMA representation of the model, show the effect of a one-unit shock in pt on ty and

zr at time t+2. Include the restrictions that are needed to identify the shocks from the residuals,

(for your answer choose only one restriction but mention all possible restrictions).

(b) How do you interpret c12(k) and c21(k) in general? What do these parameters represent for k=8?

What would the cumulative sum  

=0 12 )(

k kc represent?

(c) Describe what is variance decomposition? Write down the proportions of the forecast error

variance of yt+4 (σy 2 (4) ) due to shocks in the rt and pt sequences. And how do we interpret

this result? If rt explained none of the forecast error variance of {yt} what can be said about

{yt}?

 

Problem 2: Consider the following two-variable VAR model.

ytptpttttt zyzyzbby  ++++++−= −−−− 12111121111210 …………….

ztptpttttt zyzyybbz  ++++++−= −−−− 22211221212110 …………….

Here yt and zt are normally distributed with mean zero and variances 2

y and 2

z respectively.

They are also mutually uncorrelated and serially uncorrelated.

(d) Explain why you cannot directly estimate these two equations in order to plot the impulse

responses of ty and tz due to shocks in yt , and zt .

 

 

 

Problem 3: Consider six variable VAR proposed in Sims (1986). The variables included in the study

are real GNP (y), real business fixed investment (i), the GNP deflator (p), the money supply measured

by M1 (m), unemployment (u) and the treasury bill rate (r). An unrestricted VAR model was

estimated with four lags of each variable and a constant term.

 

(e) Sims obtained the 36 impulse responses using a Choleski decomposition with the ordering y → I

→ p → m → u → r. Interpret the identifying restriction of this ordering.

 

Problem 4: Consider a three variable standard monetary VAR . The variables included in the study

are real GDP (dy) growth, the GDP deflator (pi) inflation rate, and the federal funds rate (r). An

unrestricted VAR model was estimated with four lags of each variable and a constant term. I am

attaching the variance decomposition analyses. Interpret the graphs.

 

 

0

20

40

60

80

100

5 10 15 20 25 30 35 40

Percent DY var iance due to DY

0

20

40

60

80

100

5 10 15 20 25 30 35 40

Percent DY variance due to PI

0

20

40

60

80

100

5 10 15 20 25 30 35 40

Percent DY var iance due to FEDFUNDS

0

20

40

60

80

100

5 10 15 20 25 30 35 40

Percent PI var iance due to DY

0

20

40

60

80

100

5 10 15 20 25 30 35 40

Percent PI var iance due to PI

0

20

40

60

80

100

5 10 15 20 25 30 35 40

Percent PI var iance due to FEDFUNDS

0

20

40

60

80

100

5 10 15 20 25 30 35 40

Percent FEDFUNDS variance due to DY

0

20

40

60

80

100

5 10 15 20 25 30 35 40

Percent FEDFUNDS variance due to PI

0

20

40

60

80

100

5 10 15 20 25 30 35 40

Percent FEDFUNDS variance due to FEDFUNDS

Variance Decomposition

Order a Similar Paper

Final Exam Fall

/in /by

Final Exam Fall 2020 ECON 390

Prof. Gharehgozli

1

 

 

Instruction

• Thursday Dec 3rd to Wednesday Dec 9th. This is Final Exam and the due date is

Wednesday. Late submissions (even for 1 seconds) receive 0.

• Your submission must include a rscript that is error-less, with your name on top of

the script.

• All questions must have numbers in the script. EXAMPLE: “#Questions 1 Part a:”.

Note that without the correct rscript I will not grade the submission.

• Please respond to each and every single question on the PAPER as well with numbers

and sub-numbers. Otherwise I would consider 0 for your answer if you do not mention

what question you are responding to exactly, even if you have the correct answer. For

example if you are responding to question 1 part a, in your response you should start

with 1.a. …Again if you are using RStudio I want the response on both the script as

well as on paper :).

• Important: if you work with classmates you should submit 1 submission and both

your final exam scores will be multiplied by 0.9. If you collaborate and do not inform

me your score will be 0. Forget about the group chats :).

The data description is attached along with data.

Questions

Follow the instruction above and answer questions below:

Question 1 : (15/100)

• Question1 part a (5/100): Please refer to the data description, and define variables

”alcohol”, ”birthweight”, ”smoker”, ”unmarried”, ”drinks”, ”nprevist”, and ”tripre3”;

2

 

 

meaning what they are and what is their unit of measurement.

• Question1 part b (5/100): Provides summary of the variables mentioned above: min,

max, mean, and variance of each variable.

• Question1 part b (5/100): How many observations do we have? What is the unit of

observations (is it individuals, households, states,…)? How many dummy variables do

we have?

Question 2 : (20/100)

• Question 2 part a (5/100): Run a regression of birthweight over age.

• Question 2 part b (5/100): What is the model and the predicted equations?

• Question 2 part c (5/100): What is the slope and what is the interpretation of this

number?

• Question2 part d (5/100): Is the slope significant? write down the null and alternative

of this hypothesis testing, write down the tstat/zscore formula and calculate it and

provide your conclusion with the 2 approaches, tstat/zscore and pvalue approaches.

Question 3 : (35/100)

• Question 3 part a (5/100): Run a regression of birthweight over age, educ, unmarried,

smoker, alcohol.

• Question 3 part b (5/100): What is the model?

• Question 3 part c (5/100): What is the predicted equation?

• Question 3 part d (5/100): Among all the coefficients, which ones are significant and

which ones are not. WHY?

• Question 3 part e (10/100): In this model , run a ”F” test checking for simultaneous

significance of mother’s unhealthy behaviors (smoker and alcohol variables) on the

birthweight of the infants. (Hint: the regression in Question3 part a is your unre-

stricted model. Create you restricted model and run the Ftest. Important: what is

the null and alternative of this test, and what is your conclusion? calculate the Ftest

3

 

 

on paper and use the table for the critical value. You can then double check your

result with the anova command)

• Question 3 part e (5/100): In this model (part 3.a ) what is the predicted value of

infant’s birth weight for a mother who is 27 years old, who has 13 years of education,

who is married, who is not a smoker and does not drink alcohol.

Question 4 : (10/100)

• Question 4 part a (5/100): Create log of birthweight and run a single ”log-linear”

model of log(birthweight) over age.

• Question 4 part c (5/100): What is the predicted slope and what is the interpretation

of the slope? (Note it is log-linear so the interpretation is not regular)

Question 5 : (15/100)

• Question 5 part a (5/100): Provide a scatterplot of birthweight over nprevist.

• Question 5 part b (5/100): Create quadratic and cubic terms for nprevist, then run

a regression of birthweight over nprevist, nprevist2, nprevist3, unmarried, and smoker.

• Question 5 part c (10/100): Is this a good model or do we have to go with a quadratic

or linear relationship between birthweight and nprevist? Why?

Order a Similar Paper

 

Based on the Current Population Survey (CPS)

/in /by

Complete problem 6.28 at the end of Chapter 6 in the text and submit to your instructor. Complete all necessary portions in Excel and submit your completed Excel workbook and paper to your Instructor for grading. Completely answer sections a through g.

6.28. Based on the Current Population Survey (CPS) of March 1995, Paul Rudd extracted a sample of 1289 workers, aged 18 to 65, and obtained the following information on each worker:

  • Wage = hourly wage in $
  • Age = age in years
  • Female = 1 if female worker
  • Nonwhite = 1 if a nonwhite worker
  • Union = 1 if a union member
  • Education = years of schooling
  • Experience = potential labor market experience in years
  • The full data set can be found as Table 6-16 on the textbook’s Web site.
  1. Based on these data, estimate the following model, obtaining the usual regression statistics.1n Wagei = B1 + B2 Age + B3 Female + B4 Nonwhite + B5 Union + B6 Education + B7 Experience + ui
    where 1n Wage = (natural logarithm of Wage)
  2. How do you interpret each regression coefficient?
  3. Which of these coefficients are statistically significant at the 5% level? Also obtain the p value of each estimated t value.
  4. Do union workers, on average, earn a higher hourly wage?
  5. Do female workers, on average, earn less than their male counterparts?
  6. Is the average hourly wage of female nonwhite workers lower than the average hourly wage of female white workers? How do you know? (Hint: interaction dummy.)
  7. Is the average hourly wage of female union workers higher than the average hourly wage of female non-union workers? How do you know?

Writing the Final Project
The Final Project:

  • Must include a title page with the following:
  • Must address the topic of the paper with critical thought.
  • Must document all sources in APA style, as outlined in the Ashford Writing Center.
  • Must include a separate reference page, formatted according to APA style as outlined in the Ashford Writing Center.

Carefully review the Grading Rubric (Links to an external site.) for the criteria that will be used to evaluate your final project.

Order a Similar Paper

Monopoly pricing

/in /by

Section I: Monopoly pricing (50 points)

Milwaukee Utilities has a complete monopoly over the generation and transmission of energy. The following information on this company is given as follows:

Demand = 500 – 6Q

Average cost = 250 – Q

Where Q is measured in megawatts and prices and costs are measured in dollars.

How much energy would be sold and at what price if

a.) The firm sets price as a profit maximizing monopolist? Note: The marginal cost curve is twice as steep as the average cost curve.

b.) What is the firm’s profits at the monopoly price determined in part a?

c.) Now, suppose the firm adopts a two-part tariff pricing scheme for its customers such that the access fee is equal to the profit-maximizing marginal cost and the user fee is the difference between the profit maximizing monopoly price and marginal cost. Please calculate the user and access fees based on this information.

d.) Now suppose the firm practices 3rd degree price discrimination and charges the profit-maximizing price to the high reservation price customers and charges a 10 percent discount on the monopoly price to low reservation price customers. Note, low reservation price customers are those who would never pay the monopoly price. What is the price charged to the low reservation price customers? What is the profit generated by charging these profits? Are the profits greater than the profits in part ‘b’? Please explain.

e.) Now suppose the state public utility commission requires this firm to charge the competitive price, how much energy would be sold and at what price? What is the firm’s profits?

f.) Based on the profits obtained when forcing this monopoly to charge a competitive price, the regulator now requires this monopoly to set price equal to average cost (this is called second-best pricing). What is the firm’s profits when charging second-best prices?

Please show all work to receive full credit.

Section II: Game theoretic approach toward analyzing output behavior of rivals (50 points)

Firms X and Y are duopolists facing the same two strategy choices. They can either tacitly collude or they can compete in a Cournot fashion. The market demand for their product, as well as their respective cost curves are as follows:

C(qx) = C(qy) =50qi (firm X and Y’s total cost curves), where i=x or y

MC(qy) =MC(qy) = 50 (firm X and Y’s marginal cost curves)

P=500-5Q, (market demand), where Q = qx + qy .

C(q) and have the same cost structure: marginal cost and average cost both=50

a.) Calculate the respective output levels of each firm if they collude to set monopoly prices.

b.) Calculate the respective output levels of each firm if they adhere to the Cournot model.

c.) What four possible output combinations are available in this game?

d.) Derive the for possible profit outcomes for each firm that arise from producing the four possible output combinations available in this game.

e.) Use these profit outcomes to construct a 2×2 normal representative matrix for this game.

f.) Does either firm have a dominant strategy? If so, what is it?

g.) Is there a Nash equilibrium for this game? If so, what is it?

h.) Is the outcome of this game a prisoner’s dilemma? Please Explain?

Please show all work to receive full credit.

 

Order a Similar Paper

problematic observations

/in /by

Please attach all the code from R and the output you get. Justify you findings at every step.

Run an OLS regression with price as your dependent variable (using the first 16

regressors).

Include your summary output and the standardized residual-leverage plot. Do you see

any

“problematic” observations? What would that mean? Manually standardize the residuals

and calculate how many standard deviations each is from the residual mean. Which

observations have residuals that are more than 4 standard deviations from the mean?

Describe those observations and whether or not you see implausible values.

After removing any observations for which you DID find implausible values in (1) run the

regression again. Use a Q-Q plot and a Jarque-Bera test to determine whether

residuals appear to be normally distributed. Use a RESET test to determine whether a

linear functional form appears to be appropriate.

Which variables do you think might have nonlinear relationships with price? Why?

Which

variables might require interaction terms? Why?

Use a series of F tests to determine the best polynomial structure to use and whether or

not

to include the interaction terms that you suggest in (3). Run an OLS regression with

your new, nonlinear model and include your summary output. Run the Jarque-Bera and

RESET tests again, does the result change? Do you see evidence of misspecification?

 

Order a Similar Paper

Econometrics

/in /by

t should follow an essay format, which means you must add an introduction, analysis, and conclusion. The word limit of the text is 500. You should add tables as figures to avoid exceeding your word limit. You are encouraged to use at least Wooldridge (2012) in order to provide references for your tests and rationale.

Your task is to assess the most appropriate specification as displayed in Table 1. Such results are based on the data from Blackburn and Neumark (1992), which is found as WAGE2 in Wooldridge (2012). The econometric model is the following:

log(????????????????)=???? +???? ????????????????+???? ????????????????????+???? ????????????+???? ????????????2 +???? ????????????????????+???? ????????????????????+???? 0123456

Where wage is measured as monthly earning in U.S. dollars, and it is determined by years of education, years of experience, age in years and its squared value, black if the person is black and urban if the person lives in the Standard Metropolitan Statistical Area as a proxy for urban areas.

The weighted least squares (WLS) has a weight of 1/????????????????. The two-stage least squares (2SLS) uses the following variables as external instruments: mother’s education, father’s education and the number of siblings. You should also assume that those instruments are valid and relevant.

page1image58693824 page1image58703232 page1image58702464 page1image58697280 page1image58693056

First, you must select the most appropriate specification among the four [ordinary least squares (OLS), OLS with robust standard errors, WLS or the 2SLS]. Be specific on the steps you should take, the tests you should perform and their null hypothesis, and the reasoning behind the decisions you make on the selection process.

Second, after selecting the most appropriate model, you must interpret its results. You must mention the coefficients, statistical significance, R-squared and F-statistics (if appropriate). Be precise and explain the meaning and/or null hypothesis of each concept if necessary.

 

Order a Similar Paper

Graded Assignment – Alternative

/in /by

Graded Assignment – Alternative

This assignment accounts for 10% of your grade. It should follow an essay format, which

means you must add an introduction, analysis and conclusion. The word limit of the text is

500. You should add tables as figures to avoid exceeding your word limit. You are encouraged

to use at least Wooldridge (2012) in order to provide references for your tests and rationale.

Your task is to assess the most appropriate specification as displayed in Table 1. Such results

are based on the data from Blackburn and Neumark (1992), which is found as WAGE2 in

Wooldridge (2012). The econometric model is the following:

log(????????????????) = ????0 + ????1???????????????? + ????2???????????????????? + ????3???????????? + ????4???????????? 2 + ????5???????????????????? + ????6???????????????????? + ????

Where wage is measured as monthly earning in U.S. dollars, and it is determined by years of

education, years of experience, age in years and its squared value, if the person is black and

if the person lives in the Standard Metropolitan Statistical Area as a proxy for urban areas.

The weighted least squares (WLS) has a weight of 1/????????????????. The two-stage least squares

(2SLS) uses the following variables as external instruments: mother’s education, father’s

education and number of siblings. You should also assume that those instruments are valid

and relevant.

Table 1: The effects of individual characteristics on wages

Dependent variable lwage

OLS

OLS with

robust SE WLS 2SLS

educ 0.064*** 0.064*** 0.066*** 0.114***

exper 0.014*** 0.014*** 0.015*** 0.032***

age -0.010 -0.010 -0.028 -0.121

age2 0.0003 0.0003 0.001 0.002

black -0.241*** -0.241*** -0.233*** -0.167***

urban 0.188*** 0.188*** 0.182*** 0.177***

constant 5.618*** 5.618*** 5.911*** 6.761***

Observations 935 935 935 722

R2 0.206 0.206 0.199 0.155

Adjusted-R2 0.201 0.201 0.194 0.148

F Statistic

(df=6; 928) 40.199*** 40.199*** 38.387*** N/A

Note: *p<0.1;**p<0.05;***p<0.01

Econometrics

First, you must select the most appropriate specification among the four [ordinary least squares (OLS), OLS with robust standard errors, WLS or the 2SLS]. Be specific on the steps

you should, the tests you should perform and their null hypothesis, and the reasoning behind

the decisions you make on the selection process.

Second, after selecting the most appropriate model, you must interpret its results. You must

mention the coefficients, statistical significance, R-squared and F-statistics (if appropriate). Be

precise and explain the meaning and/or null hypothesis of each concept if necessary.

References

Blackburn, M. L. and Neumark, D. 1992. Unobserved Ability, Efficiency Wages, and Interindustry Wage Differentials:, date last accessed February 1, 2021, at Quarterly Journal of Economics at http://qje.oxfordjournals.org/

Wooldridge, J. M. 2012. Introduction of econometric: a modern approach, South-Western College Pub

 

Order a Similar Paper

Undergraduate Econometrics

/in /by

Homework 1

Eco 231 – Undergraduate Econometrics

Spring 2021

1. Assume that you are hired to investigate the causal effect between being raised in high-poverty

neighborhoods in the US and future outcomes during adulthood (such as health, well-being, social

networks and economic self-sufficiency). Employ the sources in the Datasets file in Blackboard

and succinctly answer the following questions:

(a) Mention a suitable dataset that can help you answer the question above. Provide its name

and the website where it can be downloaded.

(b) What is the sample size in this dataset? Is this a reasonable number for your research?

(c) Briefly describe the data you found in part (a). Using the codebook discuss which variables

are crucial to answer the research question posed in the statement above (no more than 10

lines).

2. Suppose you are a researcher interested in studying the relationship between household character-

istics and future educational outcomes of children. You have been advised that one dataset which

satisfies your requirements is the Early Childhood Longitudinal Study, Birth Cohort. Try to find

the data through the sources talked about in the Stata lecture. In order to answer the following

questions, additionally you will need to locate the codebooks of this database. (Note: You do not

need the data, the codebooks and webpage pdfs contain all information you require)

(a) Briefly describe the objectives of this study and the different rounds of the survey. Mention

the methods employed for data collection. At what ages are the interviews conducted? (Your

answer should not exceed 10 lines).

(b) Describe which are the restrictions for the use of this database.

(c) How many children are classified as low birth weight in the first round of the survey?

(d) Describe the groups of variables available in the first round. Classify them in child charac-

teristics, mother characteristics and household characteristics.

(e) Choose two variables you could employ as baseline characteristics of the household. Describe

how these variables would be relevant for studying future outcomes of children.

(f) Calculate the nonresponse rate between the initial number of individuals interviewed and the

two following rounds of the survey.

1

 

 

(g) Suppose you are interested in studying how socio-emotional skills are developed before the

age of two. Describe which assessments included in this study could be employed for this

purpose. Does the study have similar assessments for higher ages?

(h) Describe which measurements can be used to analyze the cognitive skills of children in kinder-

garten.

3. This problem asks you to work directly with Stata. Suppose you are a researcher interested in

studying the labor market outcomes of recent college graduates. One public-use, suitable dataset

for this purpose is the National Survey of College Graduates (NSCG). In order to answer the

following questions, you will need to use the attached documentation to identify the variables of

interest.

(a) Explore the survey using the interview questionnaire. Based on this, write down one scientific

question (related to the topic mentioned above) which could be answered using the NSCG.

(b) Use the interview questionnaire provided with the database to identify the variables related

to hours worked per week, weeks worked per year and year earnings. Notice that information

about weeks worked can be derived using two variables. Also note that the NSCG15 value

of 98 for hrs worked per week = logical skip.

(c) After handling invalid values properly, create a table showing the mean and standard devia-

tion of the three variables described in part (a) for men and women separately.

(d) In order to see the distribution of hours worked per week, crate a histogram of this variable

for men and women. Plot the density in the y-axis and use a bin width of 10 for the x-axis.

(e) Create a new variable lnhourwage defined as the (natural) logarithm of year earnings di-

vided by total hours worked during the year. Produce a table showing the mean, standard

deviation and percentiles 10th and 90th of this variable for men and women separately. Drop

observations which yield a negative value of this variable.

(f) Use the interview questionnaire to identify the variable which indicates whether a respondent

changed employer and/or job between 2013 and 2015, as well as the variables describing the

reason of change in case the employer is different between these two years. What is the

proportion of respondents who stayed with the same employer and job during this period?

(g) As a researcher, you are also interested in studying how the gender wage gap varies across

major fields. Using the variable related to the first bachelor degree (nbamemg) and your

variable lnhourwage create a table showing the mean hourly wage for women and men

across different majors. Which is the one that presents the higher wage gap?

(h) Run a regression of hourly wages on education separately for men and women. How does the

parameter of education differ across gender?

(i) Create a variable of potential experience ptlexper, defined as age-education-6. Run a re-

gression of hourly wages on education, potential experience and potential experience squared

separately for men and women. Interpret your results.

2

Order a Similar Paper