Econometrics

Watch the ppt 5.2 , then follow the ppt detail.
“Write a short explanation (in words) of what the econometric results on the next slide tell us.Suppose a
researcher uses survey microdata and estimates the following model of the correlates of life satisfaction in
Canada:
LS = a + b1 Poor + b2 Rich + b3 Atlantic + b4 Female + u
LS is the respondent’s rating of life satisfaction on a scale from 0 to 10
Poor is a dummy variable = 1 if household income is less than 50% median equivalent income; = 0 otherwise
Rich is a dummy variable =1 if household income is in the top quintile of the equivalent income distribution; = 0
otherwiseWhat is the point of the model? (What is the underlying research question apparently being asked?)
How do we interpret the estimated coefficients? (Which explanatory variables are statistically significant and
how do you know? What are the effect sizes? What is being controlled?)
What is the predicted life satisfaction for a poor man living in Atlantic Canada?
What is the over-all goodness of fit?
Overall, if you were to tell a policy maker the ‘story’ indicated by the results, what would it be?You can still use
an essay structure when you write (introduction, body, conclusion)
Write in your own words (it is not okay just to ‘change the words of someone else a little bit’)
You can still use in-text citation and include a bibliography if you make use of any reference materials in writing
your essay

Sample Solution

ACED ESSAYS