(3)The data in Table 3 show infant mortality rates (per 000 live birth 1998) (IN

Question

(3)The data in Table 3 show infant mortality rates (per 000 live birth 1998) (INM) in 20 countries and the percentage of age group enrolled in primary education in 1987 (P).Suppose you were asked to estimate the parameters of a regression model that includes these variables, (a) determine the dependent variable and the explanatory variable for the model and provide the rationale for your choice. (b) What is your expectation concerning the impact of the explanatory variable on the dependent variable? (c) Estimate the parameters of t model and see if your expectation is correct. (d) Test for heteroskedasticity at the 5% lev significance. Use the Glejser method. he el of

Explanation / Answer

a. According to this information, the dependent variable in this regression model should be the percentage of age group enrolled in primary education (P) and as an explanatory variable the infants mortality rates (INM) due to the fact that in an economic indicators analysis sometimes it is relevant to determine the social impact that public health and other public policies have over the level of education development, measure in this example by the enrollment in primary education (P)

b. Concerning about the expectation of the impact of the explanatory variable on the dependent variable, some economic growth theories support that idea that the quality of growth is a main issue. Therefore, an improving in terms of public health policies (for example a reduction of infants mortality rates) not only affects positive the social welfare, but create better conditions to sustain an education development (for example an increase in the percentage of the enrollment in primary education).

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