| ) Earning functions attempt to fud the eterminants earnings usig botn contos i
ID: 1104582 • Letter: #
Question
| ) Earning functions attempt to fud the eterminants earnings usig botn contos inary variable. One Jof the central questions analy2 ccl in tis rclationship is the rctuins to educchon Collechag clata from a53 individuals you estimate h Following relahonshie age o.14 10.093 Educ, tO.15. em 0.030) o.0a1 where able-thrd·ta Kca-the-value l female o if male Ethe indisidual ioaco Harr Is a binary oniable dhet nkes the vallct - Wage: is the average haury wage fo a Tnterpret the coeficient on E uc, b) what is th impact on wages getio c) UWhat doeo it meain for this stud to be akarally valid? Suppose dhat it was inal valid t what considerations wouldneed to take int Ciccont before applying the results to onotner counkExplanation / Answer
a.The coefficient of education is 0.093.So 1 additional year of education will increase my hourly wage by 100*0.093 percent, i.e,9.3 percent while all other variables are constant.It will increase since the coefficient has a positive sign.
b.The coefficient for a female married is -0.218.Hence the hourly wage will decrease for a married female b 21.8 percent than a male married.
c. The study is internally valid means that it is establishing a causal relationship between the dependent and the independent variables with significant confidence level.If we need to apply the study outside m current dataset then I need to ensure that the result is not completely dependent on the exact observation of the study.It should have a homogeneous / constant variance so that the distribution of observations do not follow any particular pattern.
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