Question
In: Economics
1) Driving cars and generating energy produces many pollutants. Suppose you are interested in determining whether...
1) Driving cars and generating energy produces many pollutants. Suppose you are interested in determining whether exposure to one pollutant, sulfur dioxide (SO2), has an effect on human health (health). You also suspect that older people are more affected and people with higher incomes can invest in health insurance to reduce their risk and exposure. Note, the variables in your data are health outcomes (health), exposure to SO2, income, and age.
a) Write down a multiple variable regression model that tests the relationship between health outcomes (health) and exposure to SO2 controlling for age and income.
b) Next, you suspect that the marginal effect of exposure to sulfur dioxide depends on a persons’ age. In other words, you think that older people are harmed more by SO2 exposure than younger people. Write down a new model to test this relationship, still controlling for income.
c) For the model you wrote down in part b, write down a null hypothesis that the effect of SO2 on health outcomes does not depend on a persons’ age. Hint: the hypothesis is that one of the coefficients in the regression equation in part b is equal to zero.
d) Write down the t-statistic to test the null hypothesis from part c. What criteria would you use to decide whether or not you can reject your null hypothesis.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
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