THE UNIVERSITY OF NEW SOUTH WALES
SCHOOL OF ECONOMICS
SEMESTER 2, 2011
STUDENT NAME: ______________________________________________
TUTORIAL (DAY AND TIME):______________________________________
1. TIME ALLOWED – 1 hour
2. READING TIME – 5 minutes
3. THIS EXAMINATION PAPER HAS 12 PAGES
4. INSTRUCTIONS: ANSWER ALL QUESTIONS ON THE EXAM PAPER.
5. THE MID-TERM EXAM IS WORTH 20% OF THE SEMESTER GRADE.
6. ALL ANSWERS MUST BE WRITTEN IN INK. EXCEPT WHERE THEY ARE EXPRESSLY REQUIRED,
PENCILS MAY BE USED ONLY FOR DRAWING, SKETCHING OR GRAPHICAL WORK
8. CANDIDATES MAY USE CALCULATORS
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You find the following estimates:
Indexi = 0.053 - 0.095 Fi + 0.020 PHDi + 0.007 FPHDi + 0.0015 TENi
(0.002) (0.011) (0.009) (0.003) (0.0005) where the standard errors are denoted in parenthesis. You want to test
H0: tenure has no effect on the probability of earning >$500,000 per annum versus
H1: tenure has a positive effect on the probability of earning >$500,000 per annum.
You will use a 5% level of significance to conduct this test. You get an asymptotic t-stat equal to
3.0. Using the tables provided at the end of the exam, choose one of the following as an appropriate critical value to conduct this test:
9. Refer to the model and estimates in the previous question. Ceteris paribus, according to these estimates (and ignoring statistical significance):
a. Women without PHDs have a higher probability of earning >$500,000 than men without
b. Men with PHDs have a lower probability of earning >$500,000 than men without PHDs.
c. Women with PHDs have higher probability of earning >$500,000 than women without PHDs.
d. Women with PHDs have higher probability of earning >$500,000 than men with PHDs.
10. Refer to the model and estimates in the previous question. You want to test that