ESENTIALS OF ECONOMETRICS STATA SW 4 AND 5 with VERIFIED ANSWERS

a) Compute the sample mean for average hourly earnings (AHE) in 1992 and in 2008. Construct a 95 % confidence interval for the population means of AHE in 1992 and 2008 and the change between 1992 and 2004. b)In 2008, the value of the Consumer Index Price was 188.9. In 1992, the value of CPI was 140.3. Repeat (a) but use AHE measured in real 2008 dollars; that is, adjust the 1992 data for the price inflation that occured between 1992 and 2004. c) If you were interested in change in workers' purchasing power from 1992 to 2008, would you use the results (a) or (b). Explain. I would certainly use the results from (b) since there the 1992 data are already adjusted for the price inflation that occured between 1992 and 2008. d) Use the 2008 data to construct a 95 % confidence interval for the mean of AHE for highschool graduates. Construct a 95 % confidence interval for the mean of AHE for workers with a college degree. Construct a 95 % confidence interval for the difference between the two means e) Repeat (d) using the 1992 data expressed in 2008 dollars f) Did real wages of high school graduates increase from 1992 to 2008 ? Explain. Did real wages of college graduates increase ? Did the gap between earnings of college and high school graduates increase? Explain, using appropriate estimates, confidence intervals and test statistics. g) Table 3.1 presents information on the gender gap for college graduates. Prepare a similar table for high school graduates using the 1992 and 2008 data. Are there any notable differences between the results for high school and college graduates. Using the calculated data from E views workfile, we can fill in the next table.ESE