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Economics 4 Essay Example
 Category:Macro & Microeconomics
 Document type:Assignment
 Level:Undergraduate
 Page:1
 Words:351
Economics 4
Econometrics
Question 7.1

Interpret the estimated equation
SAL=24200 + 1643GPA+5033METRICS R^{2} = 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.

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= ψ_{0}Z_{1} +ψ_{1 }Z_{2}+ ψ_{2} Z_{2}+ψ_{3 }Z_{3 }+Ԑ
ψ_{0 = 242000}
ψ_{1= 1643}
Z_{1 }=Metrics
ψ_{2= 5033GPA}
Z_{3 }= 1 if male and 0 othewise

How would you modify the equation to see if the value of econometrics was the same for men and women.
ψi= ψ_{0} +ψ_{1 }+ ψ_{2} +ψ_{3 }Z_{3 }
ψ_{2= 5033}
Z_{2 = }Metrics
ψi= ψ_{0} +ψ_{1 }+Z_{1 }+ ψ_{2} Z_{2}+ψ_{3 }Z_{3 }
ψ_{2}= 5033
Z_{2 = }Metrics
ψi= ψ_{0} +ψ_{1 }+Z_{1 }+ ψ_{2} Z_{2}+ψ_{3 }Z_{3 }
Z_{3} = 1 either male or female
SAL = (24200+ ψ_{3 }) + 1643 GPA +5033 Metrics

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 + ψ_{3 }Z_{3}
SAL=24200 +1643 GPA +5033METRICS + ψ_{3 . . . . ………………….}Equation 1
_{}SAL=24200 +1643 GPA +5033METRICS + ( ψ_{3}0)…………….Equation 2
SAL=24200 +1643 GPA +5033METRICS
Question 7.2

When should emergency expect more calls
On Saturday, because parameter is higher and has lower error.

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

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.