Earnings of Mexican street vendors. Detailed interviews were conducted with over
ID: 3132085 • Letter: E
Question
Earnings of Mexican street vendors. Detailed interviews were conducted with over 1,000 street vendors in the city of Puebla, Mexico, in order to study the factors influencing vendors’ incomes (World Development, February 1998). Vendors were defined as individuals working in the street, and included vendors with carts and stands on wheels and excluded beggars, drug dealers, and prostitutes. The researchers collected data on gender, age, hours worked per day, annual earnings, and education level. A subset of these data (STREETVEN) appears in the accompanying table.
Obs
vendor
earnings
age
hours
1
21
2841
29
12
2
53
1876
21
8
3
60
2934
62
10
4
184
1552
18
10
5
263
3065
40
11
6
281
3670
50
11
7
354
2005
65
5
8
401
3215
44
8
9
515
1930
17
8
10
633
2010
70
6
11
677
3111
20
9
12
710
2882
29
9
13
800
1683
15
5
14
914
1817
14
7
15
997
4066
33
12
A)
What is the estimated slope relating annual earnings (y) to hours worked (x2) when age (x1) is 20? What is the estimated slope relating annual earnings (y) to hours worked (x2) when age (x1) is 50? Interpret the results.
Obs
vendor
earnings
age
hours
1
21
2841
29
12
2
53
1876
21
8
3
60
2934
62
10
4
184
1552
18
10
5
263
3065
40
11
6
281
3670
50
11
7
354
2005
65
5
8
401
3215
44
8
9
515
1930
17
8
10
633
2010
70
6
11
677
3111
20
9
12
710
2882
29
9
13
800
1683
15
5
14
914
1817
14
7
15
997
4066
33
12
Explanation / Answer
Let, dependent variable y = annual earnings
and independent variables are x1 = age
x2 = hours worked
Here we have to find regression equation.
This we can done by using EXCEL.
steps:
Insert data in EXCEL sheet --> Data --> Data Analysis --> Regression --> ok --> Input Y Range : select y-range --> Input x-range --> select all x1,x2 range --> output range : select on empty cell --> ENTER
output is,
The regression equation is
y = - 20 + 13.4 x1 + 244 x2
What is the estimated slope relating annual earnings (y) to hours worked (x2) when age (x1) is 20?
y = -20 + 13.4*20 + 244x2
y = -20 + 268 + 244x2
y = 248 + 244x2
Here intercept is 248 and slope for annual earnings (y) to hours worked (x2) when age (x1) is 20 is 244.
What is the estimated slope relating annual earnings (y) to hours worked (x2) when age (x1) is 50?
y = -20 + 13.4 x1 + 244 x2
y = -20 + 13.4*50 + 244x2
y = -20 + 670 + 244x2
y = 650 + 244x2
Here intercept is 650 and slope for annual earnings (y) to hours worked (x2) when age (x1) is 50 is 244.
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