Q1:

a. Estimate equation.
Interpret the Beta.
Note that Ethwhite is left out as reference, to used to compare with Asian and
Black.
Estimate equation : write the name of every X. Then Substitute Beta.
.Explain the meaning of each Beta
Ethasian: = 1, then 0.25 units of crime to be Asian more than to be white
Ethasia = 0, then no chance for Asian to commit crime. It can only be black
and white.
E.g: The regression coe cient, b = 0.2744 means that if Xt increases in 1
unit, Yt will increase in 0.2744 units, i.e., for each extra hour of study the mark
increases in 0.2744 points.
Meaning of estimated intercept.
C. If other factors = 0, then the number of times a man could be arrested can
be 53.25%. Y becomes a constant model. This mean C is the minimum value
of Y, also is the starting point of the graph on the Y- axis, if other factors = 0.
Q2:
f- test: k = coefficient +1 = 7.
N= 1495
R2= in table
Tra bang F- test, k-1= 6 (ngang), doc. : infinity. = 2.10
Q2a:
R- squared= 0.0088148 (no rounding).
Thay ACT = sth not significant

Q3:
3B3 (PTIME86)= B4 (QEMP86)

Wald test: 3C4 = C5

F-Statistic= 2.520724, within AR= [0; 3.84]. Accept H0
H0 : 3B3 = B4: triple effect
H1 : 3B3 # B4: not have triple effect
P- value: 0.1126 > 0.05 (alpha), accept H0
Conclude: has triple effects.
Generate series Z.
Re- estimate the model, sub z: narr86 c avgsen tottime z ethasian ethblack
(show results)
Steps Calculate F*
RSSr = 1134.619
RSSu = 1132.7 (in table q1)
Ku = 7
Kr = 6
Thay so, tinh theo CThuc F*
3c: same. Conclude triple result

Q4:
Same hypothesis Ho. H1
Viet lai AR, thay so =[-1.96; 1.96]
Same conclusion.
4b (i): same. Sub ALCOHOL = PTIME86.

Estimate model again, without PTIME86.

narr86 c avgsen tottimeqemp ethasian

ethblack
r-quared=

0.072824

adj r-squared=
0.069711

Estimate model again, without QEMP86.

narr86 c avgsen tottime ptime86 ethasian

ethblack
r-quared=

0.050633

adj r-squared=
0.047445

Conclude: choose the model without PTIME86.

(ii): same as sample.
Q5: same. To plot the graph, Quick -> Graph-> AVGSEN RESID01
Do the same for the others. Then save the graph.
-

First plot, scatter: with homoscedasticity: AVGSEN, TOTTIME

- Second plot: copy the steps

Conclude: same as sample

Q6:
Auxiliary regression:
^i=a0 +a1 AVGSEN i + a2 TOTTIM Ei +a3 PTIME 86i +a 4 QEMP 86i +a5 ETHASIAN i +a6 ETHBLACK i +a 7 AVG
U

Note: The same as sample ETHASIAN2, ETHBLACK2 not included

H0: a0=a1=.=a25=0 -> Homoskedasticity
H1: at least one of the coefficients not equal to 0
y A.R = [0,2

( ,1)

] = [0,2(0.05 ,251) ] = [0,36.4150]

Run White tests on Eviews

R-squared =
0.025161

LM=nR2=37.615695

Conclusion: not in the range, reject H0

b) Same as sample
Q7:
The same as sample, substitute ACT -> QEMP86
Q8:
Run eviews based on instructions
Same conclusion as sample
Q9:
Same
Q10:
Using DW tables for n=1495 and k = 6(excluding intercept)
Dl = 1.90842
Du = 1.92181
DW statistic =
1.969219

it is in the range of no autocorrelation