*---------------------------------- *Regressions below use WAGE2 Data *---------------------------------- . use wage2 . summarize Variable | Obs Mean Std. Dev. Min Max -------------+-------------------------------------------------------- wage | 935 957.9455 404.3608 115 3078 hours | 935 43.92941 7.224256 20 80 IQ | 935 101.2824 15.05264 50 145 KWW | 935 35.74439 7.638788 12 56 educ | 935 13.46845 2.196654 9 18 -------------+-------------------------------------------------------- exper | 935 11.56364 4.374586 1 23 tenure | 935 7.234225 5.075206 0 22 age | 935 33.08021 3.107803 28 38 married | 935 .8930481 .3092174 0 1 black | 935 .1283422 .3346495 0 1 -------------+-------------------------------------------------------- south | 935 .3411765 .4743582 0 1 urban | 935 .7176471 .4503851 0 1 sibs | 935 2.941176 2.306254 0 14 brthord | 852 2.276995 1.595613 1 10 meduc | 857 10.68261 2.849756 0 18 -------------+-------------------------------------------------------- feduc | 741 10.21727 3.3007 0 18 lwage | 935 6.779004 .4211439 4.744932 8.032035 . generate logwage = log(wage) . regress logwage educ Source | SS df MS Number of obs = 935 -------------+------------------------------ F( 1, 933) = 100.70 Model | 16.1377042 1 16.1377042 Prob > F = 0.0000 Residual | 149.518579 933 .160255712 R-squared = 0.0974 -------------+------------------------------ Adj R-squared = 0.0964 Total | 165.656283 934 .177362188 Root MSE = .40032 ------------------------------------------------------------------------------ logwage | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- educ | .0598392 .0059631 10.03 0.000 .0481366 .0715418 _cons | 5.973063 .0813737 73.40 0.000 5.813366 6.132759 ------------------------------------------------------------------------------ . regress educ brthord Source | SS df MS Number of obs = 852 -------------+------------------------------ F( 1, 850) = 37.29 Model | 173.087012 1 173.087012 Prob > F = 0.0000 Residual | 3945.88364 850 4.64221605 R-squared = 0.0420 -------------+------------------------------ Adj R-squared = 0.0409 Total | 4118.97066 851 4.84015353 Root MSE = 2.1546 ------------------------------------------------------------------------------ educ | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- brthord | -.2826441 .0462882 -6.11 0.000 -.3734967 -.1917915 _cons | 14.14945 .1286754 109.96 0.000 13.89689 14.40201 ------------------------------------------------------------------------------ . ivreg logwage (educ = brthord) Instrumental variables (2SLS) regression Source | SS df MS Number of obs = 852 -------------+------------------------------ F( 1, 850) = 16.63 Model | -4.20185534 1 -4.20185534 Prob > F = 0.0000 Residual | 151.01792 850 .177668141 R-squared = . -------------+------------------------------ Adj R-squared = . Total | 146.816065 851 .172521815 Root MSE = .42151 ------------------------------------------------------------------------------ logwage | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- educ | .1306448 .0320385 4.08 0.000 .0677609 .1935287 _cons | 5.030397 .432949 11.62 0.000 4.180622 5.880171 ------------------------------------------------------------------------------ Instrumented: educ Instruments: brthord ------------------------------------------------------------------------------ . . ivreg logwage IQ sibs exper (educ = brthord) Instrumental variables (2SLS) regression Source | SS df MS Number of obs = 852 -------------+------------------------------ F( 4, 847) = 18.09 Model | -42.218046 4 -10.5545115 Prob > F = 0.0000 Residual | 189.034111 847 .223180768 R-squared = . -------------+------------------------------ Adj R-squared = . Total | 146.816065 851 .172521815 Root MSE = .47242 ------------------------------------------------------------------------------ logwage | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- educ | .2218325 .1504894 1.47 0.141 -.0735434 .5172084 IQ | -.0048519 .0092115 -0.53 0.599 -.0229319 .0132282 sibs | .0072957 .0164688 0.44 0.658 -.0250288 .0396201 exper | .0474759 .0276861 1.71 0.087 -.0068656 .1018174 _cons | 3.720701 1.469646 2.53 0.012 .8361253 6.605276 ------------------------------------------------------------------------------ Instrumented: educ Instruments: IQ sibs exper brthord ------------------------------------------------------------------------------ . log close log: c:\classes_ISU\2005_2006\econ371\solutions\ps9new.log log type: text closed on: 10 Jan 2006, 15:49:05 -------------------------------------------------------------------------------