AQRM Exercise Lecture

Week 17

Rabeya Khatoon
Office: 1.04, 25-27 Belgrave Road
Office Hours: Mondays 10.30 to 11.30, 13.30 to 14.30
• Go to www.responseware.eu

• Enter session ID as AQRMEL3

Exercise 1
a) What is the residual sum of squares (RSS)?

A. 1.77
B. 10.84
C. 12.60
D. Don’t know
  What is ?
(b)

• 

A. Both A and B
 =0.14 is interpreted as
A. The goodness of the model is
0.14
B. The two included regressors
explain 14% of the outcome
variations in the sample
c) What could you say about the value of the
 adjusted ?

• 

A. Need more information

What is the formula for F-statistic?
• 
 What hypothesis does F statistic
test?

•A.  ,
B. ,
C. ,
 If F=6.28 and the critical F value at 5% level is 3.11,
which one is the correct interpretation of the test?

A. The model is not significant at

5% level
B. The coefficients are not
significant at 5% level
C. The model is overall significant
at 5% level
D. Not sure
Exercise 2
What is the interpretation of the
intercept term?
A. The average value of logwage
for individuals without a
diploma or a university degree
is 6.78
B. The log of average wage for
individuals without a diploma
or a university degree is 6.78
C. The average value of logwage
for individuals without a
university degree is 6.78
 What is the interpretation of edu_hs
coefficient?
A. the average logwage of those with a
high school diploma is 0.09
B. the difference in average wage between
those with a high school diploma (but
no university degree) and those without
a high school diploma is 0.09
C. the difference in wages between those
with a high school diploma (but no
university degree) and those without a
high school diploma is 9.9%
D. Not sure, can you please explain?
Is the coefficient of edu_uni
statistically significant?

A. Yes, at 5% level
B. No at 5% level
C. Yes, at 19% level
D. Both B and C
Does education have an effect on
earnings?
A. Yes, as the coefficients are
significant
B. No, as the coefficients are not
significant
C. Yes, as the p value of F stat is
less than 0.05
D. Not sure
What is the estimated effect of getting a university
degree (compared to a high school diploma) on logwage?

• 

A. Explain please
If the error term has a normal distribution, what is the
estimated median wage of individuals without a high
school diploma?

•A.  =885.01
B. =0.9057
C. =6.78
D. =-0.099