Imagine a high school senior is considering which colleges and universities to a
ID: 3183231 • Letter: I
Question
Imagine a high school senior is considering which colleges and universities to apply to. She and her parents want to investigate the costs of attending different institutions, so she collects data randomly for 100 national universities and liberal arts colleges from the U.S. News and World Report annual rankings. Next, she estimates the following regression (Note: data is hypothetical): Cost 17,311.17 3,985.20 x Reputation -0.20 x Size 8,406.79 x Dpriv -416.38 x Dlibart 2,376.51 x Dreligion R2 0.72, SER 3,773.35 where Cost is Tuition, Fees, Room and Board in dollars, Reputation is the index used in U.S. News and World Report (based on a survey of university presidents and chief academic officers which ranges from l ("marginal") to 5 ("distinguished"), Size is the number of undergraduateExplanation / Answer
a) yes coefficient have expected signs.Variables are highly positively correlated.
b) Estimated cost : 17311.17+ 3985.2*4 - 0.2*22000 -416.38
= 17311.17 + 15940.8 - 4400 -416.38
= 28435.59 units
c) We think that more students attend in private institutions ,as SER VALUE INCREASES.
d) Causality is cost depends on size , type of institution & other facilities.