1 Let kids denote the number of children ever born to a woman, and let educ denote years of education for the woman. A simple model relating fertility to years of education is kids = Bo + Bjeduc + u, where u is the unobserved error. (i) What kinds of factors are contained in u? Are these likely to be correlated with level of education? (ii) Will a simple regression analysis uncover the ceteris paribus effect of education on fertility? Explain.

1 Let kids denote the number of children ever born to a woman, and let educ denote years of education for the woman. A simple model relating fertility to years of education is kids = Bo + Bjeduc + u, where u is the unobserved error. (i) What kinds of factors are contained in u? Are these likely to be correlated with level of education? (ii) Will a simple regression analysis uncover the ceteris paribus effect of education on fertility? Explain.

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

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 1.4CE

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