Introductory Econometrics: A Modern Approach 6th Edition by Jeffrey M Wooldridge

Exercise 1

Use the data in WAGE1.RAW for this exercise.

(i) Estimate the equation

Save the residuals and plot a histogram.

(ii) Repeat part (i), but with log(wage) as the dependent variable.

(iii) Would you say that Assumption MLR.6 is closer to being satisfied for the levellevel model or the log-level model?