5. It has been conjectured that workplace bans induce smokers to quit by reducin

Question

5. It has been conjectured that workplace bans induce smokers to quit by reducing their opportunities to smoke. Using data on a sample of 10,000 US indoor workers, you estimate the effect of workplace smoking bans on smoking. 3 Suppose you estimate the following regression smoke = + ,smkban + 2female + )education + ,age + ,age, u, where smoke is a dummy variable indicating whether a worker is a smoker or not; smkban is a dummy indicating whether there is a smoke ban at workplace, female is a dummy for female; education and age are in years.

Explanation / Answer

The general equation of Regression is of the form:

Y = B0 + B1.X1 + B2.X2 + ........ and so on where Y is the dependent variable and Xi's are the independent variables with coefficients Bi's.

Specifically, B0 is an intercept of Y which means when the dependent variables take the value zero, Y takes the value of B0.

Now. the coefficients of the dependent variables tell us the amount of change in Y when B is changed by one unit.

1) A negative coefficient of smoke ban means that if ban is effected, there is a 0.16 chance of the smoking being given up.

2) The more education a person gets, the lesser the chances (0.02 for every 1 person) of a person being a smoker; as the coefficient is negative.

3) Plugging in the values for age = 22; female = 1; education = 16; u =0; smoke = 0.135, we get:

0.16.smkban = 0.000480

which means smkban = 0.003

which implies a positive relation with smoking. The female is likely to smoke with 0.003 chance.

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