It has been conjectured that workplace smoking bans induce smokers to quit by reducing their opportunities to smoke. In this assignment you will estimate the effect of workplace smoking bans on smoking using data on a sample of 10,000 U.S. indoor workers from 1991 to 1993, available on the textbook website www.pearsonhighered.com/stock_watson in the filed smoking. The data set contains information on whether individuals were or were not subject to a workplace smoking ban, whether the individuals smoked, and other individual characteristics. A detailed description is given in Smoking_Description, available on the website. For the following questions, use any software of your choice, but make sure you include the relevant table showing your results. You will receive zero credits if your regression tables are not included.
a) Estimate the probability of smoking by using smoking ban as your independent variable. Attach your regression table.
b) Estimate a linear probability model with smoker as the dependent variable and the following regressors: smkban, female, age, age2, hsdrop, hsgrad, colsome, colgrad, black, and hispanic. (attach your regression table).
Compare the estimated effect of a smoking ban from this regression with your answer in part (a).
c) What does the coefficient on smkbansuggest?
d) Is the coefficient on smoking ban statistically significant at 95%?
e) To test the hypothesis that the probability of smoking does not depend on the level of education, what do you have to do? You just need to explain and do not need to actually do the test.
f) What would you do to test whether there is a nonlinear relationship betweenage and the probability of smoking? You just need to explain and do not need to actually do the test.