Suppose That in an Effort to Explain Variation in Wages,you

question 13

Essay

Suppose that in an effort to explain variation in wages,you collect a panel data set with 12,300 total observations over 3 different years and you estimate the following pooled cross-section model $$\begin{array} { lllll } lo\widehat { g~wa}ge _ { i , t } =& 10.374 +& 0.023 \text { Experience } _ { i , t } +& 0.104 \text { Education } _ { i , t } + &0.036 \text { Married } _ { i , t } \\& (1.592) &(0.002)&(0.034) &(0.004)\\\\&&&n = 12,300 \\&&&R ^ { 2 } = .3246 \\\end{array}$$
a)How many individuals are included in your sample in each of the three years? How do you know? Explain.
b)How do you interpret the estimated sample regression function? Explain.
c)What is a potential shortcoming associated with this model? Explain.
d)What would be the simplest way to address the issue raised in (b)? Why would this address the issue? Explain.

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Definitions:

Vivid Imagery

Vivid imagery involves the use of descriptive language to create detailed and clear mental pictures or experiences, enhancing imagination and memory.

Memory Process

Memory Process involves the phases of encoding, storage, and retrieval of information, crucial for learning and recalling past experiences.

Information Retained

The amount or portion of learned material that an individual can recall or use over time.

Serial Position Effect

a phenomenon in memory that suggests people have a higher tendency to recall the first (primacy effect) and last (recency effect) items in a series.