Applied Econometrics2
Applied Econometrics
Question 2
a.
b.
The estimated intercept is 4.62605. The estimated slope is 0.5118171.
AHE = 4.62605 + 0.5118171 * Age
Since age increases by 1. AHE increases by 0.5118171.
c. Mary
Age = 26
AHE = 4.62605+0.5118171*26=17.93
Patrick
Age = 30
AHE = 4.62605+0.5118171*30=19.98
d. Age does not account for a large fraction of the variance in earnings across individuals because R-squared=0.0185 which means it only has 1.85% effect to the average hourly earnings.
e.
f.
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