Economics assignment using STATA

| November 18, 2015

Using the Earnings_and_Height dataset, perform the following exercises.
1. Test whether the difference in mean height for men and women is statistically significant? Is it?
2. Does the distribution of height for men and women in the US follow the normal distribution? Answer by looking at detailed summary statistics and high order moments of the data.
3. If you were to select one al observation from the data at random, what is the probability that individual is than sixty seven inches tall?
4a. Run the following regressions and interpret the coefficient on the height variable.
I. Regress earnings on height
II. Regress log of earning on height
III. Regress log earnings on log of height
4b. which model is preferred?
5a. Regress log of earnings on height and height²
5b. is there a non-linear relationship between height and log earnings?
5c. Give a-formula for the effect of a change in height on the change in log earnings.
6. Create the following variables:
I. A dummy variable for being-Hispania.
ii. A dummy variable for being black.
iii. A dummy variable for being female.
iv. A set of region dummy variables.
7a. Run the following regression separately by gender:
Regress log earnings on height education age black Hispanic
7b. Is there a difference in the estimated effect of height on earnings by gender?
8. Run the following regression: Regress log earnings on height education age black Hispanic female and a set of region indicators, and perform the following tests (and interpret the results): I. Test for the equality of coefficients on the Hispanic and black variables.
ii. Test the hypothesis that the coefficients on female, black and Hispanic are all zero.
9a. Run the following regression for men: Regress log earnings on height height² education age black Hispanic and a set of region indicators. Is there evidence of a non-linear relationship between height and log earnings for men?
9b. Estimate the effect of a one inch increase in height on log earnings for a man starting an average height)
10. Discuss the following threats to internal validity regarding the model in (8):
I. measurement error focusing on earnings and height)
ii. Omitted variables bias

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