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Stock and Watson Empirical Excercises with Solutions From University of Oslo.
Typology: Exercises
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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.
Black-Sounding Names White-Sounding Names Black-White Difference