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Chapter 13.Solutions to Empirical Excercises, Exercises of Trade and Commerce

Stock and Watson Empirical Excercises with Solutions From University of Oslo.

Typology: Exercises

2021/2022

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Chapter 13
Experiments and Quasi-Experiments
Solutions to Empirical Exercises
1. The following table provides answers to (a)–(c)
Dependent Variable === Call_Back
Regressor (1) (2) (3) (4)
Black 0.032**
(0.008)
0.038**
(0.012)
0.023*
(0.011)
Female × Black 0.008
(0.012)
High
0.014
(0.008)
0.023
(0.012)
High × Black
0.018
(0.016)
Intercept 0.097**
(0.006)
0.097**
(0.006)
0.073**
(0.005)
0.084**
(0.008)
Significant at the 5% * and 1% ** level.
(a) From (1) in the table, the call-back rate for whites is 0.097 and the call-back for blacks is
0.097 0.032 = 0.065. The difference is 0.032 which is statistically significant at the 1% level.
These number implies that 9.7% of resumes with white-sounding names generated a call back.
Only 6.5% of resumes with black-sounding names generated a call back. The difference is large.
(b) From (2) in the table, the call-back rate for male blacks 0.097 0.038 = 0.059, and for female
blacks is 0.097 0.038 + 0.008 = 0.067. The difference is 0.008, which is not significant at the
5% level.
(c) From (3) in the table, the call-back rate for low-quality resumes is 0.073 and the call-back rate
for high-quality resumes is 0.073 + 0.014 = 0.087. The difference is 0.014, which is not
significant at the 5% level. From (4) the (high-quality)(low-quality) difference for whites is
0.023 and for blacks is 0.023 0.018 = 0.005; the black-white difference is 0.018 which is not
statistically significant at the 5% level.
(d) The following table shows estimated means of other characteristics for black and white sounding
names. There are only two significant difference in the mean values: the call-back rate (the
variable of interest) and computer skills (for which black-named resumes had a slightly higher
fraction that white-named resumes). Thus, there is no evidence of non-random assignment.
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Chapter 13

Experiments and Quasi-Experiments

Solutions to Empirical Exercises

  1. The following table provides answers to (a)–(c)

Dependent Variable === Call_Back Regressor (1) (2) (3) (4) Black (^) −0.032** (0.008)

Female × Black 0. (0.012) High 0. (0.008)

High × Black −0. (0.016) Intercept 0.097** (0.006)

Significant at the 5% * and 1% ** level.

(a) From (1) in the table, the call-back rate for whites is 0.097 and the call-back for blacks is 0.097 − 0.032 = 0.065. The difference is −0.032 which is statistically significant at the 1% level. These number implies that 9.7% of resumes with white-sounding names generated a call back. Only 6.5% of resumes with black-sounding names generated a call back. The difference is large. (b) From (2) in the table, the call-back rate for male blacks 0.097 − 0.038 = 0.059, and for female blacks is 0.097 − 0.038 + 0.008 = 0.067. The difference is 0.008, which is not significant at the 5% level. (c) From (3) in the table, the call-back rate for low-quality resumes is 0.073 and the call-back rate for high-quality resumes is 0.073 + 0.014 = 0.087. The difference is 0.014, which is not significant at the 5% level. From (4) the (high-quality)−(low-quality) difference for whites is 0.023 and for blacks is 0.023 − 0.018 = 0.005; the black-white difference is −0.018 which is not statistically significant at the 5% level. (d) The following table shows estimated means of other characteristics for black and white sounding names. There are only two significant difference in the mean values: the call-back rate (the variable of interest) and computer skills (for which black-named resumes had a slightly higher fraction that white-named resumes). Thus, there is no evidence of non-random assignment.

154 Stock/Watson - Introduction to Econometrics - Second Edition

Black-Sounding Names White-Sounding Names Black-White Difference

  • ofjobs 2435 3.658 1.219 2435 3.664 1.219 −0.006 0.035 −0. Variable n X se ( X ) n X se ( X ) Xb − Xw se ( Xb − Xw ) t -stat
  • yearsexp 2435 7.830 5.011 2435 7.856 5.079 −0.027 0.145 −0.
  • honors 2435 0.051 0.221 2435 0.054 0.226 −0.003 0.006 −0.
  • volunteer 2435 0.414 0.493 2435 0.409 0.492 0.006 0.014 0.
  • military 2435 0.102 0.303 2435 0.092 0.290 0.009 0.008 1.
  • empholes 2435 0.446 0.497 2435 0.450 0.498 −0.004 0.014 −0.
  • workinschool 2435 0.561 0.496 2435 0.558 0.497 0.003 0.014 0.
  • email 2435 0.480 0.500 2435 0.479 0.500 0.001 0.014 0.
  • computerskills 2435 0.832 0.374 2435 0.809 0.393 0.024 0.011 2.
  • specialskills 2435 0.327 0.469 2435 0.330 0.470 −0.003 0.013 −0.
  • eoe 2435 0.291 0.454 2435 0.291 0.454 0.000 0.013 0.
  • manager 2435 0.152 0.359 2435 0.152 0.359 0.000 0.010 −0.
  • supervisor 2435 0.077 0.267 2435 0.077 0.267 0.000 0.008 0.
  • secretary 2435 0.333 0.471 2435 0.333 0.471 0.000 0.014 0.
  • offsupport 2435 0.119 0.323 2435 0.119 0.323 0.000 0.009 0.
  • salesrep 2435 0.151 0.358 2435 0.151 0.358 0.000 0.010 0.
  • retailsales 2435 0.168 0.374 2435 0.168 0.374 0.000 0.011 0.
  • req 2435 0.787 0.409 2435 0.787 0.409 0.000 0.012 0.
  • expreq 2435 0.435 0.496 2435 0.435 0.496 0.000 0.014 0.
  • comreq 2435 0.125 0.331 2435 0.125 0.331 0.000 0.009 0.
  • educreq 2435 0.107 0.309 2435 0.107 0.309 0.000 0.009 0.
  • compreq 2435 0.437 0.496 2435 0.437 0.496 0.000 0.014 0.
  • orgreq 2435 0.073 0.260 2435 0.073 0.260 0.000 0.007 0.
  • manuf 2435 0.083 0.276 2435 0.083 0.276 0.000 0.008 0.
  • transcom 2435 0.030 0.172 2435 0.030 0.172 0.000 0.005 0.
  • bankreal 2435 0.085 0.279 2435 0.085 0.279 0.000 0.008 0.
  • trade 2435 0.214 0.410 2435 0.214 0.410 0.000 0.012 0.
  • busservice 2435 0.268 0.443 2435 0.268 0.443 0.000 0.013 0.
  • othservice 2435 0.155 0.362 2435 0.155 0.362 0.000 0.010 0.
  • missind 2435 0.165 0.371 2435 0.165 0.371 0.000 0.011 0.
  • chicago 2435 0.555 0.497 2435 0.555 0.497 0.000 0.014 0.
  • high 2435 0.502 0.500 2435 0.502 0.500 0.000 0.014 0.
  • female 2435 0.775 0.418 2435 0.764 0.425 0.011 0.012 0.
  • college 2435 0.723 0.448 2435 0.716 0.451 0.007 0.013 0.
  • call_back 2435 0.064 0.246 2435 0.097 0.295 −0.032 0.008 −4.