ul glaue pòint? Comment on your answer The data in WAGE2 on working men was used
ID: 3340061 • Letter: U
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ul glaue pòint? Comment on your answer The data in WAGE2 on working men was used to estimate the following equation: educ 10.36-.094 sibs + . 131 meda4c + .210feduc n = 722, R2-214, where educ is years of schooling, sibs is number of siblings, meduc is mother's years of and feduc is father's years of schooling. (i) Does sibs have the expected effect? E xplain. Holding meduc and feduc fixed, by how much does sibs have to increase to reduce predicted years of education by one year? (A noninteger answer is acceptable here.) Discuss the interpretation of the coefficient on meduc. Suppose that Man A has no siblings, and his mother and father each have 12 years of education. Man B has no siblings, and his mother and father each have 16 years of education. What is the predicted difference in years of education between B and A? (ii) (iii)Explanation / Answer
(i) Here sibs have a negative effect on the education. As the sibs coefficient is -0.094 that means if we increase number of siblings by 1, there will be a decrease of 0.094 years in predicted years of schooling. In other words, to decrease one year of education by one year, there must be 10.64 more siblings must be there. So, that is rare event to have such number of siblings so sibs doesn't have a significant effect on number of years of schooling.
(ii) The coefficient of meduc tells that if we increase one year in mother education, there will be an positive increase of 0.131 year in the total years of schooling.
(iii) Man A:
Siblings = 0, mother education = 12 , father education = 12 years
educA= 10.36 - 0.094 * 0 + 0.131 * 12 + 0.210 * 12 = 14.452 years
Man B:
Sublings = 0, mother education = 16 , father education = 16 years
educA= 10.36 - 0.094 * 0 + 0.131 * 16 + 0.210 * 16 = 15.816 years
Predicted difference in years of education between B and A = 15.816 - 14.452 = 1.364 years
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