Question

Consider the following model: log (YA) = Bo + B1S; + Balog(P) +€i where Y; denotes the mean hourly wage for individual i, S; denotes the number of years of education individual i has completed, and Pi denotes mother's education. Question 1 0/1 point (graded) Which of the following statements are true? Select all that apply. B1 is the elasticity of wage with respect to education. Each additional year of education leads to a (B1 * 100) % change in wages. B2 is the elasticity of wage with respect to mother's education. A 1% change in education leads to a 31% change in wages. A 1% change in mother's education leads to a B2% change in wages. X

Answer 1

It is true that $\beta_{2}$ is the elasticity of wage with respect to mother's education

It is true that a 1% change in mother's education leads to a $\beta_{2}$ % change in wages.

So the correct options are the third option and the fifth option.

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