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

Exercise 11

Redo Example by dropping schools where teacher benefits are less than 1% of salary.

(i) How many observations are lost?

(ii) Does dropping these observations have any important effects on the estimated

tradeoff?

Step 1 of 3

(i)

There are 408 observations in the dataset MEAP93.RAW

Out of this lot, there are four observations where teacher benefits are less than 1% of the salary. The teacher benefits to salary ratio is indicated by variable

In order to find the observations where teacher benefits are less than 1% of the salary, the condition that is applied is

That means, there are 4 observations that are lost.