Econometrics: Data Description

I attached files.





Context



Run a regression of years of completed education (ED) on distance to the nearest college (Dist). What is the estimated slope?

Run a regression of ED on Dist, but include some additional regressors to control for characteristics of the student, the student’s family, and the local labor market. In particular, include as additional regressors Bytest, Female, Black, Hispanic, Incomehi, Ownhome, DadColl, Cue80, and Stwmfg80. Interpret the estimated effect of all these regressors on ED.

Is the estimated effect of Dist on ED in the regression in (b) substantively different from the regression in (a)? Based on this, does the regression in (a) seem to suffer from important omitted variable bias? Explain.

Compare the fit of the regression in (a) and (b). Comment.

The value of the coefficient on DadColl is positive. What does this coefficient measure?

Explain why Cue80 and Swmfg80 appear in the regression. Are the signs of their estimated coefficients (+ or -) what you would have believed? Interpret the magnitudes of these coefficients.

Bob is a black male. His high school was 20 miles from the nearest college. His base year composite test score (Bytest) was 58. His family income in 1980 was $26,000, and his family owned a home. His mother attended college, but his father did not. The unemployment rate in his county was 7.5%, and the state average manufacturing hourly wage was $9.75. Predict Bob’s years of completed schooling using the regression in (b). Show all the steps.

Jim has the same characteristics as Bob except that his high school was 40 miles from the nearest college. Predict Jim’s years of completed schooling using the regression in (b).