Introductory Econometrics 4th Edition by Jeffrey Wooldridge

تمرين 2

Use the data in JTRAIN3.RAW for this question.
(i) Estimate the simple regression model re78 = 0 + 1 aratri + u, and report the results in the usual form. Based on this regression, does it appear that job training, which took place in 1976 and 1977, had a positive effect on real labor earnings in 1978
(ii) Now use the change in real labor earnings, cre = re78 - re75, as the dependent variable. (We need not difference train because we assume there was no job training prior to 1975. That is, if we define ctratn = tratn78 - tratn75 then ctratn = tratn78 because tratn75 = 0.) Now what is the estimated effect of training Discuss how it compares with the estimate in part (i).
(iii) Find the 95% confidence interval for the training effect using the usual OLS standard error and the heteroskedasticity-robust standard error, and describe your findings.