Cover Sheet
School of Economics
Project Report*
ECON2206/ECON3290 Introductory Econometrics
Due Date: Tutorial Time, Week 8 (13-17/Sep/2010)
Student ID
Student Name
Submission date
I declare that this assessment item is my own work, except where
acknowledged, and has not been submitted for academic credit elsewhere,
and acknowledge that the assessor of this item may, for the purpose of
assessing this item:
Reproduce this assessment item and provide a copy to another member of the
University; and/or,
Communicate a copy of this assessment item to a plagiarism checking service
(which may then retain a copy of the assessment item on its database for the
purpose of future plagiarism checking).
I certify that I have read and understood the University Rules in respect of
Student Academic Misconduct.
Signed: ....................................................date:
* Pay attention to the ways to report your regression results (Section 4.6 of the textbook).
* Your report should not exceed 8 pages (inclusive of STATA commands and relevant output).
Staple your pages together. Do not submit loose pages. Do not use plastic sheets or binders.
Project Description
You are doing an internship in the Research Section of the National Bureau of Labor Force,
Luckland (a country endowed with rich natural resources). Sarah, the new deputy director of the
Bureau, is working on "Strategic Training 2020", a policy outline for Luckland's long term strategies
of labor force training. She needs some vital facts about the current labor force. Sarah has requested
the Research Section to provide statistical assistance for the following questions.
a) What are the main features of the current labor force: wage, education, experience, age,
gender, married or not, immigrant or not, rural or urban?
b) What are the major factors that influence a worker’s earnings?
c) How does education influence a worker’s earnings, holding other factors fixed? How does
experience influence a worker’s earnings, holding other factors fixed?
d) In terms of earnings, is there any evidence for gender discrimination?
e) For an individual, which option would lead to better earnings: acquiring one more year
training or carrying on the current job (while holding other factors fixed)?
f) Is there any evidence for “inter-generation effect of education”, ie, the effect of parents’
education on a child’s earnings?
g) What is the predicted mean earnings for a “typical” (with average attributes) single male
rural worker?
You are assigned the task of assisting Sarah. A sample from 519 randomly-selected working
individuals is available to you. The data are stored in the file “[Link]”. The data file
contains 519 observations on the following variables from the individuals in the sample:
1. wage : hourly earnings (in Luckland dollars) in previous week
2. IQ : IQ score
3. educ : years of education
4. exper : years of work experience
5. tenure : years with current employer
6. age : age in years
7. female : =1 if female
8. married : =1 if married
9. imgrnt : =1 if not born in Luckland
10. urban : =1 if being a urban worker
11. sibs : number of siblings
12. meduc : mother's education (years)
13. feduc : father's education (years)
which are also given in the description file “[Link]”.
Your task is to analyse the data and provide answers to Sarah’s questions. You are supposed to answer all
the questions to the best of your ability, using techniques covered up to Week 6, i.e., Chapter 6 of the
textbook (inclusive). When building a regression model, you need to comment on why or why not a
particular variable is included. You may use your common sense to include regressors and use the
exclusion test to exclude regressors. In your report, the “Executive Summary” section should contain a list
of brief answers and conclusions to Sarah’s questions. In the “Main Report” section, you should report
statistical inference details that justify each of your answers and conclusions in the “Executive Summary”.
In the “Further Issues” section, you should comment on the possible extensions of your analysis and the
likely shortcomings of your analysis, including those from the limitation of data. In the “Appendix” section,
you should attach the set of STATA commands and relevant output for the project (but not data printout).
Further you do want to impress Sarah and your colleagues by submitting a nice report.