SUPERSTAR 1 denotes a dummy variable equal to one for serie A goal-scoring rates
ID: 3367035 • Letter: S
Question
SUPERSTAR 1 denotes a dummy variable equal to one for serie A goal-scoring rates of greater than 0.25 and less than or equal to 0.4, whereas SUPERSTAR 2 denotes the exceptional achievement of more than 0.4 goals per serie A game (comprising the top decile of serie A goal-scoring forwards). Consider the third set of coefficients (i.e. the last two columns-coefficients and associated p values-that are under the heading “3”)
What is the dependent variable?
What does it mean for this regression to have “team fixed effects”?
Interpret the coefficient on the variable SUPERSTAR 1.
Is this coefficient statistically significant at a 5% level? Why or why not?
Based on the variables SUPERSTAR 1 and SUPERSTAR 2, do you see evidence of existence of a superstar effect?
Lucifora, Simmons/SUPERSTAR EFFECTS IN SPORT ? TABLE 3: Estimates of Players' Earnings Function With Superstar Effects Variable 2 (Forwards Only) AGE AGE SQ APPS 94A APPS 94A SO APPS 94B APPS 94B SQ PREV APPA PREV APPA SO PREV APPB PREVAPPB SO FOR ASSIST RATE 94A 304 (0.065) MID ASSIST RATE 94A 0.460 0.504) FOR GOALS RATE 94A 0.332 (0.367) FOR GOALS RATE 94B 0.782 (0.001) MID GOALS RATE 94A 1.036 (0.086) MID GOALS RATE 94B 0.267 (0.668) DEF GOALS RATE 94A-0.076 (0.858) DEF GOALS RATE 94B 0.690 0.520) FOR STRIKE RATESO 2.296 (0.029) MID STRIKE RATE SQ 1.676 0.598) UNDER 21 ONLY TALY INT OTHER INT SUPERSTARI SUPERSTAR2 0.886 (0.000) 0.016 (0.000) 0.037 (0.000) 0.00043 (0.090) 0.0178 (0.025) 0.00002 0.927) 0.0029 (0.005) -4.28E-06 (0.174) 0.0036 (0.001) 0.00001 (0.005) 1.114 (0.000) 0.020(0.000) 0.046 (0.048) 0.0012 0.095) 0.0070 (0.702) 0.0003 (0.535) 0.0043 (0.089) 5.30E-06 (0.522) 0.0037 (0.147) 0.00001 (0.303) 1.614 (0.117) 0.879 (0.000) 0.016 (0.000) 0.0385 (0.000) 0.00046 (0.068) 0.019 (0.018) 0.0000 (0.845) 0.0028 (0.005) -4.30E-06 (0.167) 0.0037 (0.001) 0.00002 (0.004) 1.009 (0.159) 0.443 (0.518) 0.428 (0.183) 0.750 (0.002) 1.141 (0.042) 0.199 (0.745) 0.104(0.807) 0.104 (0.807) 0.373 (0.449) 0.545 (0.250) 2.454 (0.050) 0.319 (0.000) 0.410 (0.000) 0.505 (0.001) 0.322 (0.074) 0.428 (0.205) 0.204 (0.622) 0.330 (0.000) 0.419 (0.000) 0.559 (0.000) 0.337 (0.017) 0.674 (0.024) Team fixed effects Yes (significant) Yes (significant) Yes (significant) R (within) 690 693 674 Number of observations 533 533 NOTE: Dependent variable = In(SALARY), p values are in parentheses. A constant term is included in each regressionExplanation / Answer
What is the dependent variable?
The dependent variable is natural log of player's salary (ln(SALARY)).
What does it mean for this regression to have “team fixed effects”?
This means that the data has been gathered from all the levels of the team that are of interest.
Interpret the coefficient on the variable SUPERSTAR 1.
ln(SALARY) are higher for players with goal-scoring rates of greater than 0.25 and less than or equal to 0.4 than players with goal-scoring rates of less than 0.25 by 0.337.
Is this coefficient statistically significant at a 5% level? Why or why not?
The p-value for the coefficient of SUPERSTAR1 is 0.017. As, the p-value is less than the 5% significance level, we conclude that there is significant evidence that the coefficient of SUPERSTAR1 is statistically significant at a 5% level.
Based on the variables SUPERSTAR 1 and SUPERSTAR 2, do you see evidence of existence of a superstar effect?
Similarly, p-value for the coefficient of SUPERSTAR2 is 0.024. As, the p-value is less than the 5% significance level, we conclude that there is significant evidence that the coefficient of SUPERSTAR2 is statistically significant at a 5% level. As, both the variables SUPERSTAR 1 and SUPERSTAR 2 are statistically significant, there is significant evidence of existence of a superstar effect.
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