Use the data in HAPPINESS.RAW for this question. See also Computer Exercise C15 in Chapter 13….

  1. Use the data in HAPPINESS.RAW for this question. See also Computer Exercise C15 in Chapter 13.

    1. (i) Estimate a probit probability model relatingvhappytooccattendandregattend, and include a full set of year dummies. Find the average partial effects foroccat- tendandregattend. How do these compare with those from estimating a linear probability model?

    2. (ii) Define a variable,highinc, equal to one if family income is above $25,000. Includehighinc,unem10,educ, andteensto the probit estimation in part (ii). Is the APE ofregattendaffected much? What about its statistical significance?

    3. (iii) Discuss the APEs and statistical significance of the four new variables in part (ii). Do the estimates make sense?

    4. (iv) Controlling for the factors in part (ii), do there appear to be differences in happi- ness by gender or race? Justify your answer.

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