Suppose you now want to estimate if the starting age of the player impacts their salary. You estimate the following model,

where is the age at which the player started playing in the NBA.

In the model above, which one of the following is the main problem?

How much, in the OLS regression model above, can the independent variables explain (in %) the total variation observed in log(wage)? Answer correct to 2 decimal places. Please check your answer thoroughly before submitting. No partial credit would be given if your answer is incorrect.   

Now consider Victor Oladipo. He is an NBA player with 5 years of experience. He wants to know by how much will his salary change (in %) next year when he will have 6 years of experience if he continues to score the same amount of points per game. Use the estimated coefficients to help Victor Oladipo make this prediction. You can assume that the Gauss-Markov assumptions hold. Answer correct to 2 decimal places. Please check your answer thoroughly before submitting. No partial credit would be given if your answer is incorrect.   

What is the in the above equation?  Answer correct to 3 decimal places. Please check your answer thoroughly before submitting. No partial credit would be given if your answer is incorrect.   

What is the in the above equation?  Answer correct to 3 decimal places. Please check your answer thoroughly before submitting. No partial credit would be given if your answer is incorrect.   

What is the in the above equation?  Answer correct to 2 decimal places. Please check your answer thoroughly before submitting. No partial credit would be given if your answer is incorrect.   

What is the in the above equation? Answer correct to 2 decimal places. Please check your answer thoroughly before submitting. No partial credit would be given if your answer is incorrect.     

Now, use STATA to estimate,

Do you think is a reasonable assumption?

Now, use STATA to estimate,

Why do you think is NOT a reasonable assumption?

What is the in the above equation? Answer correct to 3 decimal places. Please check your answer thoroughly before submitting. No partial credit would be given if your answer is incorrect.