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Estimate linear probability model of smoking as a function of age, gender, and the number of chronic health conditions:

Question 6 (30 points): Using data set provide for the PS1_Fall 2018, estimate linear probability… 

Question 6 (30 points): Using data set provide for the PS1_Fall 2018, estimate linear probability model of smoking as a function of age, gender, and the number of chronic health conditions:

Smoker_i= beta _0+beta_aAge_i+beta _f Female_i+beta _NNumOfHealthCond_i+varepsilon _i

a= age

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f= female

N= Num of Health Condition

(12 points) Interpret coefficients and discuss statistical significance at α=1%

(2 points) Interpret and discuss adjusted R-2:

(1 point) Predict the probability of smoking for a 75 year old women with 2 chronic health conditions.

(12 points) State your hypothesis and perform one sided hypothesis testing using p-values. The significance level is provided for each variable. Fill in the table.

βageβfemaleβNumOfHealthCond
H0:
HA:
p-value
α-sign.level5%1%10%
Decision:

(3 points) What is the lowest level of α at which you can reject the null hypothesis for the coefficients of the variables above: Age, Female, Number of Health Conditions (one sided test)? Hint: Use p-values. Please remember that we consider a rejection up to 10%.

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