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Statistics 103 Problem Set 2




Question;Statistics 103 Problem Set #2;Part I ? Male Fruitflies;Examine the;data. Briefly discuss how the data is;set up. Create a dummy;variable called ?ACTIVE? that is =1 if the fruitfly has at least one partner;and =0 if he has no sexual partners.;Create a dummy called ?ACTIVE1? if PARTNERS=1. Create a dummy called ?ACTIVE8? if;PARTNERS=8. Why do we not need to create;a variable called ?ACTIVE0??Report the means;standard deviations, and medians of all variables. Discuss the meaning of the mean of the TYPE;PARTNERS, and ACTIVE variables.Report and;compare the means, standard deviations, and medians for the LNGEVITY variable if;the fruitfly has 0, 1, and 8 partners.;Does this suggest a relationship between sexual behavior and lifespan?Suppose you are;interested in finding the determinants of lifespan for male fruitflies. You will test LNGEVITY = f(PARTNERS, THORAX;SLEEP). What do you predict for the sign;of the coefficients on the independent variables?Run an OLS;regression with LNGEVITY as your dependent variable and ACTIVE1, ACTIVE8;THORAX, and SLEEP as your independent variables and report the coefficients and;t-stats for these variables as well as the constant in a table. Also report the r-squared. Discuss the results. Were your predictions correct? Interpret the coefficients? What variables are significant at the.05;level?Run another OLS;regression with LNGEVITY as your dependent variable and THORAX, SLEEP, and TYPE;as your dependent variables for those you are active only. Prepare another table similar to the table;needed for question 6 above. Discuss;these results.What conclusions;can you make about the sexual and sleeping behavior of male fruitflies and;their lifespan?;Part II ? CEOs;Examine the;data. Briefly discuss how the data is;set up. Are there any outliers in the;data? In other words, are there any;observations that are considerably higher or considerably lower than the;remainder of the data points?Create;size Dummies for each SMALL, MEDIUM, and LARGE companies where SMALL are;companies with up to $6 billion in sales, LARGE are companies with over $20;billion in sales, and MEDIUM are all those in between. Report the means;standard deviations, and medians of all variables.;Report the;correlation coefficients for the variables.;Discuss your findings.Suppose you are interested;in what determines salary and/or total compensation. Discuss which variables you should include on;the right hand side of these regressions.;Be careful to discuss the concept of correlation vs. causation here.Run an OLS;regression with SALARY as your dependent variable and any appropriate;independent variables of your choosing.;Report the appropriate coefficients, t-stats, and r-squared in a;table. Discuss the results.Repeat question 6;for TOTCOMP. Compare your results to;those of question 6.Using the;variables you already have in place and/or any new ones you feel are;appropriate, develop what you feel are the most appropriate OLS regressions for;SALARY and for TOTCOMP. Be sure to;discuss your reasons why these are most appropriate and interesting.What conclusions can;you make about the determinants of CEO salary and compensation? If you were to extend this study, what;additional variables would you want to add and why?


Paper#62205 | Written in 18-Jul-2015

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