Q1.

1
i.
Model 1: OLS, using observations 1-6804

Dependent variable: totmhinc

coefficient std. error t-ratio p-value

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

const 4421.94 449.926 9.828 1.20e-022 ***

head_age −8.47498 7.85713 −1.079 0.2808

hholdsz 449.127 50.9788 8.810 1.57e-018 ***

Male 3357.64 240.657 13.95 1.22e-043 ***

Mean dependent var 7530.939 S.D. dependent var 9823.545

Sum squared resid 6.33e+11 S.E. of regression 9647.516

R-squared 0.035942 Adjusted R-squared 0.035517

F(3, 6800) 84.50687 P-value(F) 1.12e-53

Log-likelihood −72075.45 Akaike criterion 144158.9

Schwarz criterion 144186.2 Hannan-Quinn 144168.3

Excluding the constant, p-value was highest for variable 6 (head_age)

ii. The variables are: hholdsz and Male are statistically significance at 1% level.
iii. One additional head age is associated with a decrease of total monthly household income
by R8 holding constant household size and household gender.
Q1.2
i.
Model 2: OLS, using observations 1-6804

Dependent variable: totmhinc

Omitted due to exact collinearity: Farms

coefficient std. error t-ratio p-value

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

const 4374.54 742.332 5.893 3.97e-09 ***

head_age 19.3678 7.67048 2.525 0.0116 **

Male 2783.75 240.005 11.60 8.15e-031 ***

Urban 1727.52 629.176 2.746 0.0061 ***

Traditional −1607.84 647.620 −2.483 0.0131 **

Mean dependent var 7530.939 S.D. dependent var 9823.545

Sum squared resid 6.24e+11 S.E. of regression 9583.446

R-squared 0.048845 Adjusted R-squared 0.048285

F(4, 6799) 87.28720 P-value(F) 1.94e-72

Log-likelihood −72029.62 Akaike criterion 144069.2

Schwarz criterion 144103.4 Hannan-Quinn 144081.0

ii. Head age and Traditional homelands are statistically significance at 5% level.
 Male and Urban homelands are statistically significance at 1% level
iii. One additional head age is associated with an increase of total monthly household income
by R19 holding constant Urban and Traditional homelands.
 Compared to farm homelands, Urban homelands have total monthly household income
that is R1728 more holding constant head age, male, and traditional homelands.
Q1.3
i.
Model 3: OLS, using observations 1-6804 (n = 6209)

Missing or incomplete observations dropped: 595

Dependent variable: l_totmhinc

coefficient std. error t-ratio p-value

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

const 7.69672 0.168765 45.61 0.0000 ***

l_head_age 0.102239 0.0448661 2.279 0.0227 **

l_hholdsz 0.282054 0.0217689 12.96 6.65e-038 ***

Mean dependent var 8.390245 S.D. dependent var 1.160544

Sum squared resid 8097.292 S.E. of regression 1.142257

R-squared 0.031578 Adjusted R-squared 0.031266

F(2, 6206) 101.1818 P-value(F) 5.73e-44

Log-likelihood −9634.527 Akaike criterion 19275.05

Schwarz criterion 19295.25 Hannan-Quinn 19282.06

Log-likelihood for totmhinc = −61729.6

ii. Head age is statistically significance at 5% level

 Household size is statistically significance at 1% level.
iii. 1% increase in household age is associated with 0.10% increase in total monthly
household income holding constant household size.
Q2

Model 4: OLS, using observations 1-6804

Dependent variable: RES2

Omitted due to exact collinearity: Farms

coefficient std. error t-ratio p-value

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

const 6.08035e+07 1.59996e+07 3.800 0.0001 ***

head_age −207303 165323 −1.254 0.2099

Male 5.49385e+07 5.17286e+06 10.62 3.83e-026 ***

Urban 2.94065e+07 1.35607e+07 2.169 0.0302 **

Traditional −2.95876e+07 1.39582e+07 −2.120 0.0341 **

Mean dependent var 91774944 S.D. dependent var 2.11e+08

Sum squared resid 2.90e+20 S.E. of regression 2.07e+08

R-squared 0.039587 Adjusted R-squared 0.039022

F(4, 6799) 70.06182 P-value(F) 3.15e-58

Log-likelihood −139921.8 Akaike criterion 279853.6

Schwarz criterion 279887.7 Hannan-Quinn 279865.4

Excluding the constant, p-value was highest for variable 6 (head_age)

Q3
i. PCINC = 4977-34*head age - 2159*DFSD_ATELESS_1 + ε
ii.
Model 5: OLS, using observations 1-6804 (n = 6790)

Missing or incomplete observations dropped: 14

Dependent variable: PCINC

Omitted due to exact collinearity: DFSD_ATELESS_2

coefficient std. error t-ratio p-value

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

const 4976.86 196.839 25.28 7.16e-135 ***

head_age −33.5278 3.76454 −8.906 6.68e-019 ***

DFSD_ATELESS_1 −2159.30 158.096 −13.66 6.44e-042 ***

Mean dependent var 2980.307 S.D. dependent var 4874.801

Sum squared resid 1.56e+11 S.E. of regression 4786.716

R-squared 0.036096 Adjusted R-squared 0.035812

F(2, 6787) 127.0799 P-value(F) 6.58e-55

Log-likelihood −67168.84 Akaike criterion 134343.7

Schwarz criterion 134364.1 Hannan-Quinn 134350.7

iii. Head age and DFSD_ATELESS_1 are statistically significance at 1% level.

 An additional head age is associated with a decrease in per capita income by R34 holding
constant DFSD_ATELESS_1
 Relative to DFSD_ATELESS_2, DFSD_ATELESS_1 have per capita income that is
2159 less holding constant head age.