3. Suppose you estimate the above log-linear model (ln(infmort) = 0 + 1 gdppc +
ID: 3044868 • Letter: 3
Question
3. Suppose you estimate the above log-linear model (ln(infmort) = 0 + 1 gdppc + u) and estimate 1 to be -0.000055. This literally means that for a 1 unit increase in gdppc, ln(infmort) decreases by 0.000055 units.
Which of the following best describes the meaning of a 1 unit increase in gdppc?
A $1 increase in gross domestic product (GDP) per capita.
A 1 percent increase in gross domestic product (GDP) per capita.
A 100 percent increase in gross domestic product (GDP) per capita.
4. Suppose you estimate the above log-linear model (ln(infmort) = 0 + 1 gdppc + u) and estimate 1 to be -0.000055. This literally means that for a 1 unit increase in gdppc, ln(infmort) decreases by 0.000055 units. Which of the following best describes the meaning of a 0.000055 unit decrease in ln(infmort)?
A decrease in the infant mortality rate of 0.000055 deaths per 1,000 live births.
A decrease in the infant mortality rate of 0.000055 percent.
5. Suppose you would like to compare the predictive power of the log-linear model to the linear-log model above. Which of the following best describes this comparison?
Log-linear models always have better predictive power.
Linear-log models always have better predictive power.
The model with the higher R squared has better predictive power.
The R squared is not appropriate for comparing models with different dependent variables.
A $1 increase in gross domestic product (GDP) per capita.
A 1 percent increase in gross domestic product (GDP) per capita.
A 100 percent increase in gross domestic product (GDP) per capita.
The Stata output below shows a linear-log model Inf mort-0 + 1 In gdppc) + u where int mort is the infant mortality rate number of deaths per 1,000 live births and gdppc s the GDP per capita 2005 dollars) reg infmort ingdppc Source df MS Number of obs F 1, 207)301.76 Prob F R-squared Adj R-squared = 0.5912 Root MSE 209 Model 70738.6499 48525.4685 207 234.422553 1 70738.6499 -0.0000 -0.5931 Residual Total 119264.118 208 573.385185 -15.311 infmort Coef. Std. Err. (95% conf . Interval] Ingdppc12.13944.6988275 -17.37 0.000-13.51717 -10.76171 137.8823 cons 126.3775 5.835595 21.66 0.000 114.8727Explanation / Answer
1) A unit unit increase in gdppc means
A $1 increase in gross domestic product (GDP) per capita.
2) A decrease in the infant mortality rate of 0.000055 deaths per 1,000 live births.
3)The model with the higher R squared has better predictive power.
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