1. In their paper on peer effect in golf, Guryan, Kroft and Nodowidigdo investig
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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. TABLE 4 THE EFFECT oF PEERS' ABILITY ON OwN ScORE own ability 0,672 0.949 (0.039) (0057) Average(ability), partners 0,035 0.036 0.032 (0.040) (0063) (0.040) Yes Yes Yes Tournament x category fixed effects Measurement error correction No Yes No Player fixed effects No No Yes 17,492 17,492 17,492 Notes: Results in column Column 2 reports a measurement-error-corrected estimate using the estimator described in Appendix B. Column 3 reports results using player fixed ellects 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 fixedeffects and weighteachobservation by the inverse of the sam- pling variance of estimated ability of each player. 1. Consider the first regression (left hand column). a. What is the dependent variable? b. What is the hypothesis being tested?Explanation / Answer
1.
a) Here the dependent variable is the Player's own score.
b)The hypothesis being tested here is that there are no peer effects in golf. Another way of stating this hypothesis is to say that the coefficient on Average(ability) and partners is equal to 0.
c) Average(ability),partners captures the hypothesis.
d) In this regression the coeffient is -0.035. {Obtained from the table}
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