Consider a simple OLS model that regresses college GPA (gpa) on high school GPA (hsgpa) andparental income (pincome, in $1000 per month).B₁ + B₂hsgpa + B3pincome + e.Empirical estimation using observations generates the following STATA output.gpa =SourceModelResidualTotalgpahsgpapincome_consSS1273.27041671.879965dfCoef. Std. Err..6866603 .0103571.3033177.0066108-.6697239 .0358777Which statement below is incorrect?MSNumber of obsF(2, 3997)Prob > FR-squaredAdj R-squaredRoot MSEt P>|t|===4,000[95% Conf. Interval]A college student whose parents do not have an income is expected to earn a negative GPA.High school GPA is a significant contributing factor to college GPA.Besides high school GPA and parental income, there exist other factors that affect college GPA.Every $1000 increase in parental income is expected to raise a student's college GPA by 0.303.

gpa=β1+β2hsgpa+β3 pincome+egpa=0.6866603+0.3033177hsgpa-0.6697239+e (0.010300)…

Answered: A college student whose parents do not…

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A college student whose parents do not have an income is expected to earn a negative GPA.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 1.3CE

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Question

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Consider a simple OLS model that regresses college GPA (gpa) on high school GPA (hsgpa) and
parental income (pincome, in $1000 per month).
B₁ + B₂hsgpa + B3pincome + e.
Empirical estimation using observations generates the following STATA output.
gpa =
Source
Model
Residual
Total
gpa
hsgpa
pincome
_cons
SS
1273.27041
671.879965
df
Coef. Std. Err.
.6866603 .0103571
.3033177
.0066108
-.6697239 .0358777
Which statement below is incorrect?
MS
Number of obs
F(2, 3997)
Prob > F
R-squared
Adj R-squared
Root MSE
t P>|t|
=
=
=
4,000
[95% Conf. Interval]
A college student whose parents do not have an income is expected to earn a negative GPA.
High school GPA is a significant contributing factor to college GPA.
Besides high school GPA and parental income, there exist other factors that affect college GPA.
Every $1000 increase in parental income is expected to raise a student's college GPA by 0.303.

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