http://www.nber.org/papers/w13422.pdf 1. Consider the first regression (left han
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Question
http://www.nber.org/papers/w13422.pdf
1. Consider the first regression (left hand column).
a. What is the dependent variable? _____________
b. What is the hypothesis being tested?
c. Which variable captures the hypothesis? ___________
d. What is its coefficient? ____________
e. What does the coefficient mean?
f. Is it significant at the 5% level? ____________
g. What does this mean?
h. Would you say that there is good evidence for peer effects? Explain.
i. Is the coefficient on own ability significant at the 5% level? ______________
j. What type of variable is this? ______________
k. What does this estimate mean (in English)?
1. In their paper on peer effect in golf, Guryan, Kroft and Nodowidigdo investigate whether a player's score is lower if his playing partners are better golfers. Ability is measured by the average score per round over the season. Other influences on score are controlled using fixed effects. (Don't worry about this term - we will study it later.) Standard errors appear in parentheses below the coefficient estimate. The data involve scores from rounds played during several Professional Golf Association seasons. The paper is here: http://www.nber.org/papers/w13422.pdf You should not have to read the paper to answer this question.~ Consider this regression table from their paper.v TABLE 4 -THE EFFECT OF PEERS' ABILITY ON OWN SCORE 0.949 (0.057) Own ability Average(ability). partners Tournament x category fixed effects Measurement error correction Player fixed effects 0.672 (0.039) 0.035 (0.040) Yes 0.032 (0.040) es -0.036 (0.063) Yes No Yes No No 17,492 No 17492 es 17,492 Notes: Results in column 1 are from baseline specifications as specified in equation (3) Column 2 reports a measurement-error-corrected estimate using the estimator described in Appendix B. Column 3 reports results using player fixed effects instead of own ability. The dependent variable is the golf score for the round. The ability variable is measured using the player's handicap. Standard errors are in parentheses and are clustered by playing group. All regressions include round fixed effects and weight each observation by the inverse of the sam- pling variance of estimated ability of each player I. Consider the first regression (left hand column). a. What is the dependent variable'?Explanation / Answer
1. Consider the first regression (left hand column).
Ans:- GolF score=0.949*own ability -0.036*Average (ability) partners
a. What is the dependent variable?
Ans:- The dependent variable is the Golf Score .
b. What is the hypothesis being tested?
Ans:- The hypothesis is being tested are as follows The null hypothesis for the variable own ability Null Hypothesis H0: the parameter is insignificant against the alternative H1: the parameter is significant. The null hypothesis for the variable Average (ability) Partners Null Hypothesis H0: The parameter is insignificant against the alternative H1: the parameter is significant.
c. Which variable captures the hypothesis?
Ans: Average (ability) Partners captures the hypothesis.
d. What is its coefficient?
Ans: the coefficient for Average ability Partner is 0.678
e. What does the coefficient mean?
Ans: That this coefficient is not equal to 1 suggests there is some measurement error in our measure of ability, but as a conditional reliability ratio this is reasonably large in magnitude.
f. Is it significant at the 5% level?
Ans: Not statistically significant at 5% level of significance.
g. What does this mean?
Ans: the parameter estimates is not lying in the interval of the parameter estimates.
h. Would you say that there is good evidence for peer effects? Explain.
Explain. Ans: Yes there is good evidence for peer effects because there is good relationship between the dependent variable and independent variable.
i. Is the coefficient on own ability significant at the 5% level?
Ans: Yes the coefficient on own ability is significant at 5% level of significance.
j. What type of variable is this?
Ans: Good explanatory variable for explaining the model and maximum percentage number of variation is explained by this model.
k. What does this estimate mean (in English)?
Ans: The parameter estimates mean one unit change in parameter estimates how much change in this model.
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