psoda 0 1 prpblck 2income
Estimate this model by OLS and report the results in equation form, including the sample size and R‐squared. Interpret the estimated coefficient on prpblck. Would you say the coefficient is economically significant? Why? (c) [1 point] Compare the estimate from part (b) with the simple regression estimate from psoda on prpblck. Is the discrimination effect larger or smaller when you control for income? Why? (d) [1.5 point] A model with a constant price elasticity may be more appropriate. Report estimates of the model
log( psoda ) 0 1 prpblck 2 log(income)
If prpblck increases by .20 (20 percentage points), what is the estimated percentage change in psoda? (e) [1.5 point] Now add the variable prppov to the regression in part (d). What happens to the estimate of 1 ? What do you think is happening? (f) [1 pioint] Find the correlation between log(income) and prppov. Is it roughly what you expected? (g)...