eQuizShow
Econometrics
Categorical Variables
Question: How would you analyze gender descrimination with the following model?
wage = B0 + B1(educ) + B2(exper) + B3(tenure)
Answer: You would use the following equation, and look at the null hypothesis that D0, D1, D2, and D3 are all equal to zero.
wage = B0 + D0*female + [B1*educ + D1*educ*female] + [B2*exper + D2*exper*female] + [B3*tenure + D3*tenure*female]
Question: What are two ways to calculate the likelihood of a null hypothesis with multiple dummy variables?
Answer: An F-test, which can be done in Stata, or a Chow test
Question: How would you go about running a Chow test?
Answer: - Split the data into two groups, male and female
- Find the SSR (sum of squared residuals) for the male group and the female group
- Find the SSR for the entire population
- Chow = [(SSR all - (SSR male + SSR female)) / (SSR male + SSR female)] * [(n - 2(k+1))/(k+1)]
- To calculate the statistic, this is an F distribution for k+1,n-2(k+1)
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Diff-in-Diff
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Panel Data
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IV
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General Review
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