The following multiple regression model uses lwage (which is the value of log(hourly wage)) as dependent variable, educ (education years) as the independent variable to run a regression as follows. STATA commands and outputs are given on the STATA output page. Answer the following questions. lwage= β0 +β1 educ + u
1) According to the STATA output, what are the minimum and the maximum for education years (denoted as educ) in the sample? 2) Write down the estimation result in an equation form based on the STATA output. Make sure to include all estimated coefficients, number of observations and R-squared. 3) Interpret the coefficient in front of educ. 4) The intelligence variable IQ score is omitted in this model, do you think the coefficient in front of educ is unbiased? why? 5) What is the predicted change in the hourly wage if education years increases by (last digit of cuny id + 3) points holding other factors fixed? 6) What does the disturbance term u in this model represent? Give two examples.