04 Jun Question 1. It has been conjectured
Question
1. It has been conjectured that workplace bans induce smokers to quit by reducing
their opportunities to smoke. Using data on a sample of 10,000 US indoor workers,
you estimate the effect of workplace smoking bans on smoking.
Suppose you estimate the following regression
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1 2 3 45 smo smkban female education age age u ke , ?? ? ? ? ? ? ?? ? ? ? ?
where smoke is a dummy variable indicating whether a worker is a smoker or not;
smkban is a dummy indicating whether there is a smoke ban at workplace, female is
a dummy for female; education and age are in years.
Here is what you estimate:
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smoke smkban female education age age ˆ ?? ? ? ? ? 0.35 0.16 0.20 0.03 0.01 0.00003
1) How would you interpret the estimated coefficient for smkban?
2) How would you interpret the estimated coefficient for education?
3) For a female aged 30 with 16 years of education who works at a place where
smoke is allowed, the predicated value smokeˆ =0.157. How would you
interpret it?
2. The primary question of interest is this: Do athletes perform more poorly in
school during the quarter their sport is in season? Suppose you have data for 200
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football players from a large university for fall and spring quarters. Football players
play their sport only in the fall.
Suppose the academic ability levels of football players differ from each other. You
try to estimate the following regression:
1 23 4 5 qrtGPA hsperc sat female fall load u ?? ? ? ? ? ? ? ? ?? ? ?
Where qrtGPA is quarter GPA; hsperc is high school percentile, sat is SAT score,
female is a dummy indicating a female player, and fall is a dummy for the fall
quarter, and load is the total number of classes taken in a quarter.
1) Compare OLS applied directly to the above regression with “difference”
estimation using data differenced across the two quarters, which one do you
prefer? Why?
2) If you do “difference” estimation, what variables will drop out?
3) Suppose the following is what you got.
=-.065 – .12 ,
(.043) (.007)
? ? qrtGPA load
where ? represents difference between fall and spring quarters. What is the
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