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

Exercise 11

Use the data set in WAGE2.RAW for this problem. As usual, be sure all of the following regressions contain an intercept.

(i) Run a simple regression of IQ on educ to obtain the slope coefficient, say, ?1 .

(ii) Run the simple regression of log(wage) on educ, and obtain the slope coefficient, ?r

(iii) Run the multiple regression of log(wage) on educ and IQ, and obtain the slope coefficients, ?1 and ?2, respectively.

(iv) Verify that ?1 = ?1 + rA .

Step 1 of 4

The following table shows the regression output:

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	53.6872	2.62293	20.4684	3.4E-77	48.5396	58.8347
educ	3.53383	0.19221	18.3853	1.2E-64	3.15662	3.91104

The slope coefficient from the regression IQ on educ is (rounded to five decimal places) .