You need to upload two files as answers for this:
(1) A word document with descriptive answers to the questions; (2) A .txt file (Textedit in Mac and Notepad in Windows) with input-output from the R-console. Copy and paste your work from R Console to the .txt file. Answer all questions:
1. Upload the "CPS1985" dataset from the AER library. It has data which would allow us to analyze the determinants of wages. Carry out the following operations on the data. a. Present a brief description of the data. In particular, display the rst six rows of the data to reveal the type of variables the dataset has. Transform wage to its log form.
b. Plot log of wage against experience variable. What kind of regression model specification would be suitable to represent the relationship between the two variables? Run the appropriate regression model. Create additional variables if required for this model. Interpret the variables. [17 points]
c. Report the summary of results. Report the confidence intervals of the coefficients. Interpret the coefficients and comment on their individual significance. Comment on the goodness of t of the regression model.
d. Describe the omitted variable bias that may arise in the regression specification you have estimated above.
e. Run a regression model by including the education, gender, married and interaction between gender and married variables in addition to the specification you have estimated in (b).
f. Compare the summary statistics from (c) with the specification we ran in (e).
g. Report and interpret the F statistic. Why might the t-test for significance of coefficients be inadequate in the specification described in (e)?
h. Compute and report the standard error of regression, SER.
i. Do you think the specification in (e) is a better representation of determinants of log of wage?
PLEASE SHOW ALL WORK