Write down the Latent Variable Model for Equation - Management Assignment Help

Assignment Task:

Task:

Part I

You are interested in the determinants of working women having children under the age of 6. The descriptive statistics by age group are in Table 1. The variables kidslt6, educ, and age are count variables representing number of kids under 6, education, and age. The variables hours and hushrs are continuous variables representing hours worked and hours worked by husband. If OLS was used to estimate the model, the estimating equation would be kidslt6i = β0 + β1 ∗ educi + β2 ∗ hoursi + β3 ∗ agei + β4 ∗ hushrsi + ui (1) Each number should be considered an independent question unless stated otherwise. Table 1: Descriptive Statistics by Age Group Age Groups 30 to 39 40 to 49 50 to 60 Total N (percentage of sample) 268 (39.5) 257 (37.9) 153 (22.6) 678 (100.0) ** continuous variables *** *** *** *** Hours Worked/Year, mean (sd) 766.090 (880.861) 792.759 (867.830) 609.954 (865.095) 740.965 (874.056) Hours Worked/Year Husband, mean (sd) 2309.989 (576.516) 2212.860 (587.830) 2226.941 (625.627) 2254.431 (593.021) ** discrete variables *** *** *** *** Number of Kids<6, mean (sd) 0.489 (0.684) 0.089 (0.299) 0.013 (0.114) 0.230 (0.516) Educational Attainment, mean (sd) 12.519 (2.201) 12.261 (2.220) 11.830 (2.528) 12.265 (2.297) Age of Woman, mean (sd) 34.269 (2.914) 44.708 (2.734) 53.778 (2.870) 42.628 (8.089) Stand deviation is in parenthesis except in the rst row. In the rst row the number in parenthesis is percentage of sample.

1. (TFU) A researcher notes that mother's education (meduc) of each individual could be a good instrument for educ although it could be correlated with error term in equation (1). You do show that educ and meduc are strongly correlated. Since E(meduc, u) 6= 0 is likely true, you should use OLS.

2. We want to estimate a Probit model instead of OLS. Write down the latent variable model for equation (1). Be specic to the information given.

3. We have estimated the model described in 2 and the results are Calculate the partial eect at the averages for Figure 1: Results hours and hushrs for the groups 30 to 39 and 50 to 60. Show work.

4. Using the information in 2 and 3, what is the partial eect at the averages for a woman in the sample that has a high school education (educ = 12) vs someone with 11 years of education (educ = 11)?

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