This is econometrics homework The following equation represents a regression mod
ID: 3200008 • Letter: T
Question
This is econometrics homework
The following equation represents a regression model for the number of children in a family: Children = 0 + 1motherseduc + 2fatherseduc + 3familyincome + u, Where children is the number of children, motherseduc and fatherseduc are the years of education of the mother and father respectively and familyincome is the income of the family. We expect 1 < 0, 2 < 0 and 3 < 0. a. What is the effect of omitting family income from the regression model on 1 and2 if each parent’s education is positively correlated with family income? b. Write the null hypothesis, restricted regression, test statistic and degrees of freedom for a test of the hypothesis that the effect of mother’s education equals the effect of father’s education.
Explanation / Answer
Solution:-
a.In the first place this regression model indicates that hoding family income constant both parent education will increase by B1 and B2 respectively.when we omit the family income then the parents education will be reduced by B1 and B2 since they are correlated with the family income.
b.
The null hypothesis is given as;
H0:B1<B2<B3<0
the restricted regression
Children = B0+U
The test statistic
To specify the test statistics we use the F-test method which is given as
F=[(RSSR-RSSUR)/J]/(RSSUR/n-k)
The degrees of freedom to use in testing the hypothesis
0.05 or 5%
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.