do you need to use any transformation of any of your variables?

INSTRUCTIONS TO CANDIDATES

ANSWER ALL QUESTIONS

TASK 2 (20%) In this part you should focus on your research question, proceed with analysis, and write a short report. Think about the most suitable model for your analysis. 2.1. State your research question (e.g., I want to study whether there are gender differences in Math scores). 2.2. What is your dependent variable? 2.3. Which independent variables do you plan to use in your regression? Prepare a table in which you describe the expected sign of the estimated coefficient, you explain why you expect that sign, and why did you decide to include that variable in your regression 2.4. Do you need to use any transformation of any of your variables? Discuss why yes/not. (Note: for example, would you benefit from having a logarithm or your squared variable in your regression? You may use figures showing the distribution of your data to argue why yes/why no). 2.5. Write your econometric model formally. 2.6. Run your regression, write your estimated form of your model. (Note that you are asked to present your final choice of your regression model. Make sure you think carefully about it.) 2.7. Interpret the estimated coefficients, comment on the p-values. 2.8. Comment on the F-test and its p-value. 2.9. Comment on the R-squared and adjusted R-squared. 2.10. Write a short summary of your findings: a. State again what was your research question/hypothesis. b. What are your findings? c. Do you think your findings are generally true (are they externally valid)? Or do you think there are some limitations you’d need to acknowledge?

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