Question

please answer all parts to this question,

thank you

2. Retrieve and read the relevant section of the article on social mobility in Canada (on D2L) and answer the following questions: represent? a) Explain the regression model in equation (1): Identify the dependent and independent variables. What does b represent? b) Examine regression results reported in Table 1, page 19. What are the definitions of the dependent and independent variables? Interpret the coefficient under scenario 4 for total income. Compute the actual t-statistic for the coefficient. Explore whether the coefficient is significant at the 5% level( two-tail test) assuming that the critical value of t is 2.0. c) Examine regression results in Table 2, page 22. How do results in Table 2 differ from those in Table 1? (2 marks)

the equation 1 is:

the table 1 data is:

the table 2 data:

all the relevant data and numbers havr been attached below the question.

Answer 1

a. in the model, it is being represented how fathers income affects the income of their sons.

Y^s represents the income of the son.

alpha represents the income of the son when their father's income is zero.

beta represents how many units of sons income changes when one unit of fathers income changes.

e(the error term) represents the amount of income which can be explained by the factors other than fathers income.

b. the dependent variable is the selected variable which is assumed to be changed which is caused by the change in independent variables.

the independent variable is the variable which is not influenced by the changed of other variables.

Interpretation of scenario 4's results of total income:

"the mean total income of the sons of their ages 38 to 42" changes by 0.359 units when "fathers mean total income between their ages 35 to 55" changes by 1unit.

T statistic:

t=(estimated beta-0)/standard error=0.359/0.003=119.66

t value> critical t value at 5% signifance level (=2)

hence the coefficient 0.359 is statsitically significant at 5% significance level.

c. in table 2 the dependent variable is the daughter's income.

the beta coefficients of table 2 are less than the beta coefficients of table 1. hence we can say that daughter's income is less influenced by fathers income than that influence on son's income.