A researcher wants to investigate the relationship between the annual income of

Question

A researcher wants to investigate the relationship between the annual income of a father (FI:) and the annual income of his oldest child (CI) measured in thousands of dollars. Having collected that data on FIi, CIi, their age differences (AD,), and the gender of the child (Gi 1 if the child is a daughter and zero otherwise). The researcher estimates the following regressions assuming homoskedasticity: ai In (Ch) Cli (0.2) + (0014)FL + (236)ln (AD) = (0.2) (0.014) (0.36) 0.23+ 0.0047FL+0.35 In (ADi)- Gi = (0.19) (0.002) ) (0.71) (0.06) 1.03 +0.25Flit2.3In (ADi)- Gi-0.10F4xGi = ()() (0.34) (0.19) (0.003) (0.14) (0.34) (0.12) P-values are provided in the parentheses. The dataset contains 500 observations. The R2's of the first, second, and third regressions are 0.25, 0.18, and 0.26, respectively. Answer the following questions: (a) What is the interpretation for the coefficient on FI, in regressions (1) and (2)? (b) What is the interpretation for the coefficient on FIi in regression (3)? (c) what is the interpretation for the coefficient on F1.x Gi in regression (3)? (d) What is the interpretation for the coefficient on In(AD,) in regressions (1) and (2)? e Test at the 5% significance level the null hypothesis that gender has no effect on the child's income in regression specification (2) f Test at the 5% significance level the null hypothesis that gender has no effect on the child's income in regression specification (3)

Explanation / Answer

a)

The interpritation of coefficient FI is,

For one unit change in the FI ,the 0.325 amount of change in the CI.

The interpritation of coefficient FI is,

For one unit change in the FI ,the 0.0047 amount of change in the ln( CI.)

b)

The interpritation of coefficient FI*Gi is,

For one unit change in the FI*Gi ,the -0.10 amount of change in the CI^.

similarrly solve part-c and d

for part e and f please attach same question again

The interpritation of coefficient FI is,

For one unit change in the FI ,the 0.325 amount of change in the CI.

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