Transcript EXERCISE 5.5 The Stata output shows the result of a semilogarithmic regression of earnings on highest educational qualification obtained, work experience, and the.

EXERCISE 5.5
The Stata output shows the result of a semilogarithmic regression of
earnings on highest educational qualification obtained, work
experience, and the sex of the respondent, the educational
qualifications being a professional degree, a PhD, a Master’s degree,
a Bachelor’s degree, an Associate of Arts degree, and no
qualification (high school drop-out). The high school diploma was
the reference category. Provide an interpretation of the coefficients
and perform t tests.
`1
EXERCISE 5.5
. reg LGEARN EDUCPROF EDUCMAST EDUCPHD EDUCBA EDUCAA EDUCDO EXP MALE
Source |
SS
df
MS
-------------+-----------------------------Model | 57.6389757
8 7.20487196
Residual | 129.068668
531 .243067171
-------------+-----------------------------Total | 186.707643
539
.34639637
Number of obs
F( 8,
531)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
540
29.64
0.0000
0.3087
0.2983
.49302
-----------------------------------------------------------------------------LGEARN |
Coef.
Std. Err.
t
P>|t|
[95% Conf. Interval]
-------------+---------------------------------------------------------------EDUCPROF |
1.59193
.2498069
6.37
0.000
1.101199
2.082661
EDUCPHD |
.3089521
.4943698
0.62
0.532
-.6622084
1.280113
EDUCMAST |
.6280672
.0993222
6.32
0.000
.4329546
.8231798
EDUCBA |
.5053643
.0561215
9.00
0.000
.3951168
.6156118
EDUCAA |
.170838
.0765684
2.23
0.026
.0204238
.3212522
EDUCDO | -.2527803
.08179
-3.09
0.002
-.413452
-.0921085
EXP |
.0230536
.0050845
4.53
0.000
.0130654
.0330419
MALE |
.2755451
.0437642
6.30
0.000
.189573
.3615173
_cons |
2.125885
.0915997
23.21
0.000
1.945943
2.305828
------------------------------------------------------------------------------
The answer is given on the next slide. Remember that the dependent variable is the
(natural) logarithm of hourly earnings.
2
EXERCISE 5.5
. reg LGEARN EDUCPROF EDUCMAST EDUCPHD EDUCBA EDUCAA EDUCDO EXP MALE
Source |
SS
df
MS
-------------+-----------------------------Model | 57.6389757
8 7.20487196
Residual | 129.068668
531 .243067171
-------------+-----------------------------Total | 186.707643
539
.34639637
Number of obs
F( 8,
531)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
540
29.64
0.0000
0.3087
0.2983
.49302
-----------------------------------------------------------------------------LGEARN |
Coef.
Std. Err.
t
P>|t|
[95% Conf. Interval]
-------------+---------------------------------------------------------------EDUCPROF |
1.59193
.2498069
6.37
0.000
1.101199
2.082661
EDUCPHD |
.3089521
.4943698
0.62
0.532
-.6622084
1.280113
EDUCMAST |
.6280672
.0993222
6.32
0.000
.4329546
.8231798
EDUCBA |
.5053643
.0561215
9.00
0.000
.3951168
.6156118
EDUCAA |
.170838
.0765684
2.23
0.026
.0204238
.3212522
EDUCDO | -.2527803
.08179
-3.09
0.002
-.413452
-.0921085
EXP |
.0230536
.0050845
4.53
0.000
.0130654
.0330419
MALE |
.2755451
.0437642
6.30
0.000
.189573
.3615173
_cons |
2.125885
.0915997
23.21
0.000
1.945943
2.305828
------------------------------------------------------------------------------
The regression results indicate that those with professional degrees earn 159 percent more
than high school graduates, or 391 percent more if calculated as 100(e 1.592 – 1), the
coefficient being significant at the 0.1 percent level.
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EXERCISE 5.5
. reg LGEARN EDUCPROF EDUCMAST EDUCPHD EDUCBA EDUCAA EDUCDO EXP MALE
Professional
Source
|
SS 159.2df 391.3 MS 0.1%
-------------+-----------------------------PhD
30.9
36.2
not sig.
Model | 57.6389757
8 7.20487196
Master’s
62.8531 .243067171
87.4
0.1%
Residual | 129.068668
Bachelor’s
50.5
65.7
0.1%
-------------+-----------------------------Total
| 186.70764317.1
539 18.6
.34639637
Associate’s
5%
Drop-out
–25.3
–22.4
Number of obs
F( 8,
531)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
540
29.64
0.0000
0.3087
0.2983
.49302
1%
-----------------------------------------------------------------------------LGEARN |
Coef.
Std. Err.
t
P>|t|
[95% Conf. Interval]
-------------+---------------------------------------------------------------EDUCPROF |
1.59193
.2498069
6.37
0.000
1.101199
2.082661
EDUCPHD |
.3089521
.4943698
0.62
0.532
-.6622084
1.280113
EDUCMAST |
.6280672
.0993222
6.32
0.000
.4329546
.8231798
EDUCBA |
.5053643
.0561215
9.00
0.000
.3951168
.6156118
EDUCAA |
.170838
.0765684
2.23
0.026
.0204238
.3212522
EDUCDO | -.2527803
.08179
-3.09
0.002
-.413452
-.0921085
EXP |
.0230536
.0050845
4.53
0.000
.0130654
.0330419
MALE |
.2755451
.0437642
6.30
0.000
.189573
.3615173
_cons |
2.125885
.0915997
23.21
0.000
1.945943
2.305828
------------------------------------------------------------------------------
The table gives the corresponding figures for all the educational qualifications.
4
EXERCISE 5.5
. reg LGEARN EDUCPROF EDUCMAST EDUCPHD EDUCBA EDUCAA EDUCDO EXP MALE
Source |
SS
df
MS
-------------+-----------------------------Model | 57.6389757
8 7.20487196
Residual | 129.068668
531 .243067171
-------------+-----------------------------Total | 186.707643
539
.34639637
Number of obs
F( 8,
531)
Prob > F
R-squared
Adj R-squared
Root MSE
=
=
=
=
=
=
540
29.64
0.0000
0.3087
0.2983
.49302
-----------------------------------------------------------------------------LGEARN |
Coef.
Std. Err.
t
P>|t|
[95% Conf. Interval]
-------------+---------------------------------------------------------------EDUCPROF |
1.59193
.2498069
6.37
0.000
1.101199
2.082661
EDUCPHD |
.3089521
.4943698
0.62
0.532
-.6622084
1.280113
EDUCMAST |
.6280672
.0993222
6.32
0.000
.4329546
.8231798
EDUCBA |
.5053643
.0561215
9.00
0.000
.3951168
.6156118
EDUCAA |
.170838
.0765684
2.23
0.026
.0204238
.3212522
EDUCDO | -.2527803
.08179
-3.09
0.002
-.413452
-.0921085
EXP |
.0230536
.0050845
4.53
0.000
.0130654
.0330419
MALE |
.2755451
.0437642
6.30
0.000
.189573
.3615173
_cons |
2.125885
.0915997
23.21
0.000
1.945943
2.305828
------------------------------------------------------------------------------
Males earn 27.6 percent (31.8 percent) more than females, and every year of work
experience increases earnings by 2.3 percent.
5
EXERCISE 5.5
. reg LGEARN EDUCPROF EDUCMAST EDUCPHD EDUCBA EDUCAA EDUCDO EXP MALE
Source |
SS
df
MS
Number of obs =
=
=
=
=
=
Professional n = 6
Associate’s
nF(= 48
-------------+-----------------------------8,
531)
PhD
n=3
school diploma nProb
= 297
Model | 57.6389757
8High
7.20487196
> F
Residual
.243067171
Master’s| 129.068668
n = 31 531High
school drop-out nR-squared
= 46
-------------+-----------------------------Adj R-squared
Bachelor’s
n = 98 539 .34639637
Total | 186.707643
Root MSE
540
29.64
0.0000
0.3087
0.2983
.49302
-----------------------------------------------------------------------------LGEARN |
Coef.
Std. Err.
t
P>|t|
[95% Conf. Interval]
-------------+---------------------------------------------------------------EDUCPROF |
1.59193
.2498069
6.37
0.000
1.101199
2.082661
EDUCPHD |
.3089521
.4943698
0.62
0.532
-.6622084
1.280113
EDUCMAST |
.6280672
.0993222
6.32
0.000
.4329546
.8231798
EDUCBA |
.5053643
.0561215
9.00
0.000
.3951168
.6156118
EDUCAA |
.170838
.0765684
2.23
0.026
.0204238
.3212522
EDUCDO | -.2527803
.08179
-3.09
0.002
-.413452
-.0921085
EXP |
.0230536
.0050845
4.53
0.000
.0130654
.0330419
MALE |
.2755451
.0437642
6.30
0.000
.189573
.3615173
_cons |
2.125885
.0915997
23.21
0.000
1.945943
2.305828
------------------------------------------------------------------------------
The coefficients of those with professional degrees and PhDs should be treated cautiously
since there were only six individuals in the former category and three in the latter. For the
other categories the numbers of observations were: masters 31; bachelor’s 98;
associate’s 48; high school diploma (or GED) 297; and drop-out 46.
6
Copyright Christopher Dougherty 2000–2007. This slideshow may be freely copied for
personal use.
16.11.07