Question

Consider the following estimated equation QOL = 2.07 +0.81 WB+ 0.33 MW + 0.12 RM (2.018) (0.491) (0.012) (0.065) 12 = 100, R = 0.79, R = 0.778 where QOL represents quality of life, WB represents well-being, MW represents log of minimum wage and RM represents log of remittances. QOL and WB are measured on a scale from 0 to 100 percent, while MW and RM are measured in dollars. Standard errors are in parentheses (a) Interpret the coefficient on RM. (2 marks] (b) Interpret R. [2 marks] (e) Holding MW and RM fixed at 0, what is quality of life predicted to be if well-being is 5%? 13 mark! (d) Test the null hypothesis that the coefficient on MW is one against the alternative that the coefficient is less than one. 15 marks (e) Test the null hypothesis that the coefficient on RM is vero against the alternative that the coollicient is greater than vero at the 1% level. 15 marks| (1) Test the overall significance of the model. 15 marks

Answer 1

es by of rm (Remmittances) is shereaus y fuen Qol (duality of life) will Increase by by 0.0012 wit 0 77-80% variation in Quality of life is explained WB, mw, Rm. by of mwco Rm 20 QOL = 2:07 +0.81 (0.05)+ = 2:07 fo. o. 04 05 allos, goí 2 ho! - HA! ko Т. 0.33 0.012 logo -55-833 t calme is dinee Mence very Targe Neuel Hypo then's rejected CS Scanned with CamScanner