Please answer the last parts, as they are more important. Please give me details
ID: 3237987 • Letter: P
Question
Please answer the last parts, as they are more important. Please give me details, as I seek to understand and LEARN. Please answer all of the parts, as this is considered one question.
1. n their paper on peer effect in golf Guryan, Kreft and Nodowidigde investigate whether a player's score is lower if his playing partners are better golfers. Ability is measured by the average score per round over the season. Other influences on score are controlled using fixed effects. Don't worry about this term We will study it later.) Standard errors appear in parentheses below the coefficient estimate The data involve scores from rounds played during several Professional Golf Association seasons The paper is here: http://www.nber.org/papers/w13422.pdf You should not have to read the paper to answer this question. Consider this regression table from their paper. TABLE 4 THE EFFECT OF PEERS' ARILITY ON OwN SCORE. own ability 0.672 0,949 0.057) Average ability), partners 0.035 0.036 0.032 (0040) (0.063) (0.040) Tournament x category fixed effects Yes Yes Yes Measureme Yes No Player fixed emecls 17492 7.492 17.492 Notes: Results in column 1 are from baseline specifications as specified in equation (3). Column 2 reports a measurement-enror-corrected estimate using the estimator described in Appendix B. Column 3 reports results using player fixed effects instead of own ability. The dependent variable is the golf score for the round. The ability variable is measured using the player's handicap. Standard errors are in parentheses and are clustered by playing group. All regressions include round nxed errects and weighteach observation by the inverse orthe sam- pling variance of estimated ability of each player. 1. Consider the first regression (left hand column). a. What is the dependent variable? b. What is the hypothesis being tested?Explanation / Answer
a. The dependent variable is the golf score for the round.
b. Null hypothesis: There is no effect of the peers ability on own score.
Alternative hypothesis: There is effect of the peers ability on own score. In other words, golf score is dependent on peers ability.
c. Average (ability) partners. If the coefficient of this variable is near zero, Null hypothesis would be true else alternative hyothesis would be true.
d. The coefficient of Average (ability) partners is -0.035
e. The coefficient is negative, so for each unit of increase in the variable "Average (ability) partners", the golf score will decrease by 0.035.
f. Standard error of the coefficient = 0.040
z = Coefficient/Std error = -0.035/0.040 = -0.875
p-value for z = -0.875 is 0.1907 (Using z tables)
As p-value is greater than the significance level of 5% (0.05), we fail to reject the null hypothesis and conclude that the variable "Average (ability) partners" is not significant in determining the golf score.
In other words, there is no effect of the peers ability on own score.
g. As we fail to reject the null hypothesis, we conclude that the variable "Average (ability) partners" is not significant in determining the golf score.
In other words, there is no effect of the peers ability on own score.
h. As we fail to reject the null hypothesis, there is not good evidence for peer effects.
i. Coefficient of "Own Ability" = 0.672
Standard error of the coefficient = 0.039
z = Coefficient/Std error = 0.672/0.039 = 17.23
p-value for z = 17.23 is near zero (Using z tables)
As p-value is less than the significance level of 5% (0.05), we reject the null hypothesis and conclude that the variable "Own Ability" is significant in determining the golf score.
j. The variable is quantitative variable
k. The estimate means that for each unit of increase in the variable "Own Ability", the golf score will increase by 0.672