ECONOMICS 321 Final Assignment

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ECONOMICS 321

Final Assignment Due December 12^th 12:00PM

Worth 36 points

 The goal of this assignment is to test some of the assumptions of our regression model. You have developed the skills to run and analyze a regression in excel, now you will get some practice in testing for violations in homoskedasticity, exogeneity of the independent regressors, each individual must submit their own assignment written in their own writing (i.e., no copying other people’s assignments). If you work with someone else, write a note at the top of your assignment saying who worked together. Answers that are not explained in proper sentences will only receive part marks.  Data attached.

For this exercise you will be using a variation of ECONMATH, which is cross-sectional data containing information on students' college GPA at the beginning of a semester, high school GPA, ACT math scores, ACT English scores, and other variables gathered relating to students' scores and personal information.

Variable description:

age = age in years

work = hours worked per week

study = hours studying per week

econhs = 1 if economics in high school

colgpa = college GPA, beginning semester

hsgpa = high school GPA

acteng = ACT English score

actmth = ACT math score

act = ACT composite

mathscr = math quiz score, 0–10

male = 1 if male

calculus = 1 if taken calculus course

attexc = 1 if past attendance “excellent”

attgood = 1 if past attendance “good”

fathcoll = 1 if father has BA

mothcoll = 1 if mother has BA

score = course score, in percent

1. (3 points) Prepare a table showing the summary statistics of all the quantitative variables in this sample? What is the number of Observations in the sample?

2.  (3 points) What percentage of individuals surveyed are Male? What is the mean of Colgpa by gender (mean of colgpa for male and mean of colgpa for female). Who do you think is doing better male or female.

3. (3 points) 1- Use OLS to estimate a model explaining colgpa using hsgpa, actmth, and acteng as independent variables.

(3 points) 2- Use OLS to estimate a model explaining colgpa using hsgpa, and actmth as independent variables.

Please copy past your regressions

(3 points) Do we get an indication that our estimates of colgpa without acteng were biased? If so, in which direction? And why is that? (Compering 1 and 2)

4. (3 points) Check if β1 hat, β2 hat, and β3 hat in regression 1 are all statistically significant at the 5% significance level against the two-sided alternative. Explain.

5. (9 points) Run regression 1 including the dummies gender and attexcr? Please explain the coefficients of the dummy variables. When does dummy variable trap happen?

Please copy past your regression

6. (9 points) Perform a Chow test for gender and another Chow test for attexcr.  Show your work and calculations/conclusion corresponding to tests.