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

Exercise 9

Refer to Table in Chapter 13. There, we used the data in FERTIL1.RAW to estimate a linear model for kids, the number of children ever born to a woman.

(i) Estimate a Poisson regression model for kids, using the same variables in Table 13.1. Interpret the coefficient on y82.

(ii) What is the estimated percentage difference in fertility between a black woman and a nonblack woman, holding other factors fixed?

(iii) Obtain u. Is there evidence of over- or underdispersion?

(iv) Compute the fitted values from the Poisson regression and obtain the R-squared as the squared correlation between kidsi and Compare this with the R-squared for the linear regression model.

Determinants of Women’s Fertility

Step 1 of 5

(i)

Estimate the Poisson regression model with as the dependent variable on

The result is:

The coefficient of is -0.192608 and it is significant at 5% level of significance as its p-value is 0.0043 which is less than critical p-value of 0.05 at 5% level of significance.

This coefficient is interpreted as a decline in the fertility rate by 19.26% in the year 1982 vis-à-vis the year 1972.