Q1.

1 Model 1: totmhinc = β0 + β1*head_ age + β2*hholdsz + β3*Dhead_sex_1 + ε

(i).

Model 1: OLS, using observations 1-6936

Dependent variable: totmhinc

coefficient std. error t-ratio p-value

---------------------------------------------------------
const 3710.48 450.110 8.243 1.98e-016 ***
head_age 4.79367 7.72312 0.6207 0.5348
hholdsz 443.009 50.6491 8.747 2.73e-018 ***
Male 3384.29 240.648 14.06 2.59e-044 ***

Mean dependent var 7456.242 S.D. dependent var 9890.520

Sum squared resid 6.55e+11 S.E. of regression 9718.456
R-squared 0.034909 Adjusted R-squared 0.034491
F(3, 6932) 83.58011 P-value(F) 4.07e-53
Log-likelihood −73524.60 Akaike criterion 147057.2
Schwarz criterion 147084.6 Hannan-Quinn 147066.6

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 an increase of total monthly household income
by R5 holding constant household size and household gender.
Q1.2 Model 2: totmhinc = β0 + β1*head_ age + β2*Dhead_sex_1 + β3*Urban + β4*FHL + ε

(i).
Model 2: OLS, using observations 1-6936
Dependent variable: totmhinc
Omitted due to exact collinearity: Commercial

coefficient std. error t-ratio p-value

------------------------------------------------------------
const 5088.71 748.700 6.797 1.16e-011 ***
head_age 30.0979 7.56122 3.981 6.95e-05 ***
Male 2746.11 239.715 11.46 4.10e-030 ***
Urban 384.719 633.382 0.6074 0.5436
Traditional −3075.42 654.085 −4.702 2.63e-06 ***

Mean dependent var 7456.242 S.D. dependent var 9890.520

Sum squared resid 6.45e+11 S.E. of regression 9646.099
R-squared 0.049363 Adjusted R-squared 0.048814
F(4, 6931) 89.97543 P-value(F) 1.11e-74
Log-likelihood −73472.26 Akaike criterion 146954.5
Schwarz criterion 146988.7 Hannan-Quinn 146966.3

Excluding the constant, p-value was highest for variable 219 (Urban)

(ii). Head age, male and Traditional homelands are statistically significance at 1% level.

(iii). One additional head age is associated with an increase of total monthly household income
by R30 holding constant male, Urban and Traditional homelands.

 Compared to commercial homelands, Urban homelands have total monthly household

income that is R385 more holding constant head age, male, and traditional homelands.
Q1.3 Model 3: ln(totmhinc) = β0 + β1*ln(head_ age) + β2*ln(hholdsz) + ε

(i).
Model 3: OLS, using observations 1-6936 (n = 6332)
Missing or incomplete observations dropped: 604
Dependent variable: l_totmhinc

coefficient std. error t-ratio p-value

-----------------------------------------------------------
const 7.38964 0.167741 44.05 0.0000 ***
l_head_age 0.175395 0.0443655 3.953 7.79e-05 ***
l_hholdsz 0.283721 0.0217946 13.02 2.99e-038 ***

Mean dependent var 8.365401 S.D. dependent var 1.181962

Sum squared resid 8545.563 S.E. of regression 1.161991
R-squared 0.033812 Adjusted R-squared 0.033507
F(2, 6329) 110.7427 P-value(F) 5.34e-48
Log-likelihood −9933.873 Akaike criterion 19873.75
Schwarz criterion 19894.01 Hannan-Quinn 19880.76

Log-likelihood for totmhinc = −62903.6

(ii). Head age and household size are both statistically significance at 1% level

(iii). 1% increase in household age is associated with 0.18% increase in total monthly household
income holding constant household size.
Q2

Test for heteroscedasticity for Model 2 above

Model 4: OLS, using observations 1-6936
Dependent variable: RES2
Omitted due to exact collinearity: Commercial

coefficient std. error t-ratio p-value

-------------------------------------------------------------------
const 6.66162e+07 1.64696e+07 4.045 5.29e-05 ***
head_age 104253 166329 0.6268 0.5308
Male 5.33909e+07 5.27316e+06 10.13 6.27e-024 ***
Urban 1.09597e+07 1.39329e+07 0.7866 0.4315
Traditional −5.38861e+07 1.43883e+07 −3.745 0.0002 ***

Mean dependent var 92980151 S.D. dependent var 2.16e+08

Sum squared resid 3.12e+20 S.E. of regression 2.12e+08
R-squared 0.038233 Adjusted R-squared 0.037678
F(4, 6931) 68.88105 P-value(F) 2.85e-57
Log-likelihood −142823.2 Akaike criterion 285656.3
Schwarz criterion 285690.6 Hannan-Quinn 285668.1

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

Q3.

3.1. PCINC = β0 + β1 * head_age + β2 * DFSD_ATELESS_1 + ε

3.2
Model 5: OLS, using observations 1-6936 (n = 6917)
Missing or incomplete observations dropped: 19
Dependent variable: PCINC
Omitted due to exact collinearity: DFSD_ATELESS_2

coefficient std. error t-ratio p-value

---------------------------------------------------------------
const 4613.56 195.532 23.59 1.89e-118 ***
head_age −26.6940 3.71241 −7.190 7.13e-013 ***
DFSD_ATELESS_1 −2049.34 155.414 −13.19 3.12e-039 ***

Mean dependent var 2951.568 S.D. dependent var 4888.639

Sum squared resid 1.60e+11 S.E. of regression 4814.827
R-squared 0.030250 Adjusted R-squared 0.029969
F(2, 6914) 107.8355 P-value(F) 7.64e-47
Log-likelihood −68465.69 Akaike criterion 136937.4
Schwarz criterion 136957.9 Hannan-Quinn 136944.5

3.3 . 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 R27 holding
constant DFSD_ATELESS_1
 Relative to DFSD_ATELESS_2, DFSD_ATELESS_1 have per capita income that is
R2049 less holding constant head age.