ECON 306 Homework 5 Answers (Penn State University)

ECON 306 Homework 5 Answers (Penn State University)Problem 1(50 points total) In the dataset Smoker, there is information on 1196 males from the United States. Data from this sample includes the variables: smoke= 1 for smokers, and 0 for nonsmokers age=age in years educ= number of years of schooling income= family income pcigs= price of cigarettes in the individual’s state Part 1) a) Generate a dummy variable “hi_ed” that is a 1 if a person has 16 or more years of education. b) (5 Points) Estimate a linear regression (which in this context is called a linear probability model (LPM)) for the binary variable smoke on the independent variable hi_ed. Report the beta coefficient on the dummy variable and its p-value. In words, express what the beta coefficient means in this case........................................100% ' GRADE A+