Question

Data on working men was used to estimate the following equation: educ = 10.36 – 0.313 sibs + 0.131 meduc + 0.210 feduc

Where, sibs = siblings; meduc = mother education and feduc = father education N = 722, R2 = 0.214
(i) Does sibs have the expected effect? Explain. Holding meduc and feduc fixed, by how much does sibs have to increase to reduce predicted years of education by one year? (A non-integer answer is acceptable here.) (ii) Discuss the interpretation of the coefficient on meduc.
(iii) Suppose that Man A has no siblings, and his mother and father each have 12 years of schooling. Man B has no siblings, and his mother and father each have 16 year of schooling. What is the predicted difference in years of education between A and B?

Answer 1

The coefficient of sibs in the equation indicates that as the number of siblings increases, the predicted years of education decrease. When sibs increases by one, the predicted decrease in years of education is 0.313. The coefficient on meduc represents the expected change in education for a one unit increase in mother's education, while holding other variables constant. The predicted difference in years of education between Man A and Man B is approximately 0.558 years.

Step-by-step explanation:

(i) To determine if sibs has the expected effect, we need to look at its coefficient in the equation. Based on the given equation, the coefficient of sibs is -0.313. The negative coefficient indicates that as the number of siblings (sibs) increases, the predicted years of education (educ) decrease. Therefore, sibs does have a negative effect, which means that having more siblings is associated with a lower level of education.

To calculate the decrease in predicted years of education when sibs increases by one, we can directly use the coefficient. In this case, the decrease would be 0.313 years.

(ii) The coefficient on meduc represents the expected change in educ for a one unit increase in meduc, while holding sibs and feduc constant. So, if meduc increases by one, we expect educ to increase by 0.131 units, assuming sibs and feduc remain unchanged.

(iii) To calculate the predicted difference in years of education between Man A and Man B, we substitute their respective values into the equation. For Man A with no siblings and both parents having 12 years of education, the predicted years of education would be 10.36. For Man B with no siblings and both parents having 16 years of education, the predicted years of education would be 10.918. Therefore, the predicted difference in years of education between A and B would be approximately 0.558 years.