2) The following model is a simplified version of the multiple regression model

Question

2) The following model is a simplified version of the multiple regression model used by Biddle and Hamermesh (1990) to study the tradeoff between time spent sleeping and working and to look at other factors affecting sleep where sleep and totwrk (total work) are measured in minutes per week and educ and age are measured in years. Biddle and Hamermesh estimated the following equation sleep 3,638.25-0.148 totwrk -11.13 educ + 2.20 age+u (112.28) (.017) (5.88) N-706, SSR-123,455,057 (20 points: 5/5/5/5) (i) Explain the appropriate interpretation of the coefficient on totwrk (ii) Suppose the average undergraduate program takes 4 years to complete. All else constant, what do the regression results imply about the average impact of an undergraduate degree on sleep per week? (iii) Test whether the coefficient on tom/k is statistically different from one at the 1% level. State the null hypothesis, the alternative hypothesis, the critical value above which you would reject the null hypothesis. Then use this information to perform the appropriate (iv) Dropping educ and age from the regression gives: sleep -3,586.38-0.151 totwrk +i (38.91) (.017) N-706, SSR-124,858,119 Set up a test to determine whether educ and age are jointly significant in the original equation at the 1% level. State the null hypothesis, the alternative hypothesis, and the critical value above which you would reject the null hypothesis. Then use this information to perform the appropriate test.

Explanation / Answer

answer-

a) Interpretation: As the total work increases by 1 minute per week, sleep decreases by 0.148 minutes per week.

b) As the undergraduate program takes 4 years, then 4*11.13 = 44.52. That is sleep will decrease by 44.52 minutes per week due to this 4 years of graduation.

c) Divide -0.148/.017 = -0.131. And this value is statistically significant at a 99% confidence level.

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