Karachi Institute of Economics and Technology (Shahra-e-Faisal Site)
Course: QTMS (113115) Total Marks: 02
Faculty: Muhammad Amin Hasan Class ID: 113115
Exam: Assignment 2 Deadline: 12-08-2023
Semester: Summer-23 Submission: Submission to the LMS
Q. Suppose you want to conduct a study on “Socio-Economic and Demographic Factors Affecting Personal
Income” and want to estimate the following model:
inc = β 0 + β 1 male+ β 2 edu + β 3 exp + β 4 tjob + ε (Model 1)
Where “inc” is monthly income of the respondent which is a dependent variable; independent variables
include male (dummy variable of male coded as 1 and 0 for female), edu is education (in years), exp is
experience (in years), tjob is type of job (private or public), and ε is error term.
A. Estimate the above model using OLS method with robust standard errors and report regression results in the
MSWord table (using Stata command). Also, discuss the results.
B. Also, estimate the impact of edu on income for male and female separately by incorporating dummy
variables of male or female in the equation and estimate the following Model 2:
inc = β 0 + β 1 edu + β 2 exp + β 3 male+ β 4 (edu*male) + β 5 tjob + ε (Model 2)
C. Create a composite dummy of “exppub” indicating a person who has a job in “Public” and having
experience of more than 5 years. Also, estimate the following model:
inc = β0 + β1 edu+ β2 exp + β3 male +β4 tjob + β5(edu*male)+ β6 exppub+ ε (Model 3)
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