Since the trend coefcient is negative there is a secular

Question

In a study of turnover in the labor market, James F. Ragan, Jr., obtained the following results for the U.S. economy for the period of 1950-I to 1979-IV.* (Figures in the parentheses are the estimated t statistics.)

l^n Yt = 4.47 - 0.34 ln X2t + 1.22 ln X3t + 1.22 ln X4t+ 0.80 ln X5t - 0.0055 X6t
                (4.28)   (-5.31)         (3.64)                (3.10)       (1.10)    (-3.09)

R¯ 2 = 0.5370

Note: We will discuss the t statistics in the next chapter.

where Y = quit rate in manufacturing, de?ned as number of people leav- ing jobs voluntarily per 100 employees
X2 = an instrumental or proxy variable for adult male unemploy- ment rate
X3 = percentage of employees younger than 25
X4 = Nt-1 / Nt-4 = ratio of manufacturing employment in quarter (t - 1) to that in quarter (t - 4)
X5 = percentage of women employees
X6 = time trend (1950-I = 1)

a. Interpret the foregoing results.

b. Is the observed negative relationship between the logs of Y and X2 jus- ti?able a priori?

c. Why is the coef?cient of ln X3 positive?

d. Since the trend coef?cient is negative, there is a secular decline of what percent in the quit rate and why is there such a decline?

e. Is the R¯ 2 "too" low?

f. Can you estimate the standard errors of the regression coef?cients from the given data? Why or why not?

Answer 1

You have to attain all questions that is described as below: In a study of income in the labor market, James F. Ragan, Jr., attained the subsequent consequences for the U.S. economy for the period of 1950-I to 1979-IV.* (Figures in the parentheses are the estimated t statistics.) l^n Yt = 4.47 - 0.34 ln X2t + 1.22 ln X3t + 1.22 ln X4t+ 0.80 ln X5t - 0.0055 X6t (4.28) (-5.31) (3.64) (3.10) (1.10) (-3.09) R¯ 2 = 0.5370 Note: We will converse the t statistics in the next chapter. Where Y = quit rate in manufacturing, described as no of people leaving jobs voluntarily per 100 employees X2 = an instrumental or proxy variable for adult male unemployment rate X3 = % of employees younger than 25 X4 = Nt-1 / Nt-4 = ratio of manufacturing employment in quarter (t - 1) to that in quarter (t - 4) X5 = % of women employees X6 = time trend (1950-I = 1)