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Assignment - Group 2

The document outlines a practical assignment for an econometrics course, focusing on analyzing the relationship between monthly wage and factors such as years of experience, education, and gender. It includes statistical results from a regression analysis, tests for multicollinearity, heteroskedasticity, and omitted variable bias, along with specific tasks for students to complete. The assignment is graded based on presentation and content, with a total of 50 marks available.

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2 views2 pages

Assignment - Group 2

The document outlines a practical assignment for an econometrics course, focusing on analyzing the relationship between monthly wage and factors such as years of experience, education, and gender. It includes statistical results from a regression analysis, tests for multicollinearity, heteroskedasticity, and omitted variable bias, along with specific tasks for students to complete. The assignment is graded based on presentation and content, with a total of 50 marks available.

Uploaded by

a32318721
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Practical Assignment for Econometrics

Mark = 50 %( 20% presentation + 30% content of the assignment); Instructor: Eshetu S. (PhD)

Given: wage per month = (years of experience, years of education, gender 1 for
male)___________Group 2

Source | SS df MS Number of obs = 3,294

-------------+---------------------------------- F(3, 3290) = 167.63

Model | 4666.31659 3 1555.43886 Prob > F = 0.0000

Residual | 30527.8705 3,290 9.27898798 R-squared = 0.1326

-------------+---------------------------------- Adj R-squared = 0.1318

Total | 35194.187 3,293 10.6875758 Root MSE = 3.0461

------------------------------------------------------------------------------

wage | Coef. Std. Err. t P>|t| [95% Conf. Interval]

-------------+----------------------------------------------------------------

school | .6387977 .0327958 19.48 0.000 .5744954 .7031

male | 1.344369 .1076759 12.49 0.000 1.13325 1.555487

exper | .1248255 .0237628 5.25 0.000 .0782342 .1714167

_cons | -3.380018 .4649765 -7.27 0.000 -4.291691 -2.468346

------------------------------------------------------------------------------

vif

Variable | VIF 1/VIF

-------------+----------------------

exper | 1.05 0.951028

school | 1.05 0.953544

male | 1.03 0.974037

-------------+----------------------

Mean VIF | 1.04

hettest

Breusch-Pagan / Cook-Weisberg test for heteroskedasticity

Ho: Constant variance

Variables: fitted values of wage

chi2(1) = 112.53

Prob > chi2 = 0.0000


ovtest

Ramsey RESET test using powers of the fitted values of wage

Ho: model has no omitted variables

F(3, 3287) = 6.97

Prob > F = 0.0001

Tasks:

1. Checking model fit


2. Checking the significance of individual variables (using t-test)
3. Check Multicollinearity
4. Check Heteroscedasticity
5. Check Omission of important variables
6. 7. Interpret the significant variables after solving problems (heto, multi and omission) if any

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