ECON 2223 - Assignment III

ECON 2223 - Assignment IIICharles Saunders, Western UniversityDue date : Thursday March 10, 2016 at 4 :00 pmAssignments must be submitted as a hard copy, in class or my office.You must submit your written results (tables and discussion) as well as your scriptfile. Do NOT give me an annotated “copy and paste” of your log file.1. Start a new script file.2. Bring in the Ghana Demographic and Health Survey (DHS) data : GhanaDHS.csv3. Tabulate age, education and daily earnings, and include : the number of observations, mean, minimum and maximum each series.4. Tabulate the observation counts for : region, electricity, radio, television, fridge,bicycle, motorcycle, car, marital, and slocal.5. (Model 1) : Regress daily earnings on age, education, region, electricity, radio,television, fridge, bicycle, motorcycle, car, marital, and slocal, and present anddiscuss the results. Discuss your results, which variables are significant ? How arethe coefficients on electricity, region, age and education interpreted ?6. Provide a histogram of the Model 1 residuals.7. Generate a new series : the log of daily earnings.8. (Model 2) : Regress the log of daily earnings on age, education, region, electricity,radio, television, fridge, bicycle, motorcycle, car, marital, and slocal, and presentand discuss the results. Discuss your results, which variables are significant ? Howare the coefficients on electricity, region, age and education interpreted ?9. Provide a histogram of the Model 2 residuals.10. For Model 2, which variables could be dropped without any significant effect onthe overall regression ? Justify your decision(s). Estimate this model (2b) with yourrestrictions imposed, and present the results.11. Run an F-test that compares Models (2) and (2a). (Hint : anova function in R).12. Generate a new series called experience (exp) that is equal to age minus education,also generate experience squared (exp2). Re-estimate model 2 and include exp and1
exp2 in the regression. Explain what happens ? And present the coefficients andt-stats on exp and exp2.
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