a group of single persons- all of the same sex, age 35-44 H=1910.22+0.010w-0.008

Question

a group of single persons- all of the same sex, age 35-44

H=1910.22+0.010w-0.008v+other vaariables+e

......(5.21).......(0.091)...(0.003)

H: hours worked per year w: wage rate/hour v: nonwork income in thousands of USD per years e: the regression error term.

Question:

A: unfortunately, the economist failed to mention whether those result refer to men or to women. whould you say that its more likely that those result refer to man instead of women or to women instead of men.

B: Based on those results, is it possible to say whether leisure is a normal good for this group of single persons.

C: Based on those results, is it possible to say whether , for this group of single persons, the income effect of a wage increase is equal to, or larger than, or smaller than substitution effect.

Explanation / Answer

A. It is more likely that the results refer to men as the hours of work depends on the wage and the intercept term. The effct of non work income on the hours of work is very low.

B. Yes leisure is a normal good for this group of people.

C. The Income effect is larger than the substitution effect for this group.

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