Suppose you are interested in studying the effect of education on wages (controlling for IQ and parental income): wage, Bo + Breduc, +B1Q, +BParInc, +e, where weekly wages are measured in dollars, IQ is measured in points, education is measured in years, and average parental income is measured in tens of thousands of dollars. You want to test if the effect of IQ on wage is double that of schooling. a) What are your null and alternative hypotheses? b) Write down the restricted model.

Suppose you are interested in studying the effect of education on wages (controlling for IQ and parental income): wage, Bo + Breduc, +B1Q, +BParInc, +e, where weekly wages are measured in dollars, IQ is measured in points, education is measured in years, and average parental income is measured in tens of thousands of dollars. You want to test if the effect of IQ on wage is double that of schooling. a) What are your null and alternative hypotheses? b) Write down the restricted model.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: Earnings And Discrimination

Section: Chapter Questions

Problem 4CQQ

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