# Economics 4 Essay Example

Economics 4

## Econometrics

Question 7.1

1. Interpret the estimated equation

SAL=24200 + 1643GPA+5033METRICS R2 = 0.74

A module expresses a relationship between variables in the economics module gives there is one dependent variables. The GPA and Metrics. 24200 represent a steady state being the minimum wage. Other things being equal salary depends on GPA scores and whether a student took econometrics or not. This type of a model is called binary model with independent modules. So that it was used a qualitative variables (METRICS) to indicate the presence or absence.

1. How would you modify the equation to see if women had lower starting salaries than men.

If the economic model is modified to have another qualitative variable (gender) so that another explanatory variable factor will be added for it to have two variables i.e male and female therefore the module can be explained as follows.

ψi= ψ0Z11 Z2+ ψ2 Z23 Z3

ψ0 = 242000

ψ1= 1643

Z1 =Metrics

ψ2= 5033GPA

Z3 = 1 if male and 0 othewise

1. How would you modify the equation to see if the value of econometrics was the same for men and women.

ψi= ψ01 + ψ23 Z3

ψ2= 5033

Z2 = Metrics

ψi= ψ01 +Z1 + ψ2 Z23 Z3

ψ2= 5033

Z2 = Metrics

ψi= ψ01 +Z1 + ψ2 Z23 Z3

Z3 = 1 either male or female

SAL = (24200+ ψ3 ) + 1643 GPA +5033 Metrics

1. The file metrics.dat contains the data upon which estimation was based. Estimated the models you define in (b) and (c) and discuss the results.

SAL=24200 +1643 GPA +5033METRICS + ψ3 Z3

SAL=24200 +1643 GPA +5033METRICS + ψ3 . . . . ………………….Equation 1

SAL=24200 +1643 GPA +5033METRICS + ( ψ30)…………….Equation 2

SAL=24200 +1643 GPA +5033METRICS

Question 7.2

1. When should emergency expect more calls

On Saturday, because parameter is higher and has lower error.

1. The data are in file fullmoon.dat Replicate the results above using your software.

2. Test the joint significance of FULLMON and NEWMOON. State the null and alternative hypothesis and indicate the test statistic you use. What do you conlude.