Write down the economic model from the first regression

Question

Exercise- Consider the following STATA output:

Data from the 2010 Puerto Rico Census (sample of 5,661 individuals) used to generate the output:

• inctot_i is income of individual i
• educ_i is the level of schooling for individual i
• duc2­_i is the level of schooling, squared, for individual i
• noenglish_i is an indicator variable that =1 if individual i does not sink English

a. Write down the economic model from the first regression table. Estimate this model and report with standard mom.

b. Which coefficient estimates are statistically significant at the 1% level iu the model from part a (provide justification)? Interpret the coefficients iu the context of the economic model.

c. Estimate the marginal effect of education on income for high school graduates (EDUC = 12) for the model from part (a). Interpret this in the context of the economic model and construct a 95% confidence interval. Assume Cov(b₂,b₃)= 21.5

d. 'Test whether or not years of schooling has a significant effect on income at the 5% level.

e. Using the model from part a, estimate the "optimal" education level that maximizes income (round to the nearest whole number).