Complete problem 6.28 at the end of Chapter 6 in the text and submit to your instructor. Complete all necessary portions in Excel and submit your completed Excel workbook and paper to your Instructor for grading. Completely answer sections below the data set info.
6.28. Based on the Current Population Survey (CPS) of March 1995, Paul Rudd extracted a sample of 1289 workers, aged 18 to 65, and obtained the following information on each worker:
Wage = hourly wage in $
Age = age in years
Female = 1 if female worker
Nonwhite = 1 if a nonwhite worker
Union = 1 if a union member
Education = years of schooling
Experience = potential labor market experience in years
The full data set can be found as Table 6-16 on the textbook’s Web site.
Based on these data, estimate the following model, obtaining the usual regression statistics.
1n Wagei = B1 + B2 Age + B3 Female + B4 Nonwhite + B5 Union + B6 Education + B7 Experience + ui
where 1n Wage = (natural logarithm of Wage)
How do you interpret each regression coefficient?
Which of these coefficients are statistically significant at the 5% level? Also obtain the p value of each estimated t value.
Do union workers, on average, earn a higher hourly wage?
Do female workers, on average, earn less than their male counterparts?
Is the average hourly wage of female nonwhite workers lower than the average hourly wage of female white workers? How do you know? (Hint: interaction dummy.)
Is the average hourly wage of female union workers higher than the average hourly wage of female non-union workers? How do you know?
Writing the Final Project
The Final Project:
Must include a title page with the following:
Title of paper
Course name and number
Must address the topic of the paper with critical thought.
Must document all sources in APA style, as outlined in the Writing Center.
Must include a separate reference page, formatted according to APA style as outlined in the Writing Center.
Carefully review the Grading Rubric (Links to an external site.) for the criteria that will be used to evaluate your final project.