Assume a number of observations of 2000 for all the following and set the random seed as the last four digit of your student id.

1. Generate two variables of uniform distribution Unif(0,10), x1 and x2

2. Generate an error term u of normal distribution N(0,1)

3. Generate ystar=b0 + b1*x1 + b2*x2 + u

4. Generate a binary variable y that is one if ystar > Median value of ystar, and 0 otherwise

5. Perform a linear regression of ystar on x1 x2

6. Use probit to estimate the marginal effect of x1 on y

7. Use logit to estimate the marginal effect of x2 on y

8. Use linear probability model to estimate the marginal effect of x1

9. Compare the results from 6,7,8

10. Generate a categorical variable y1 that is 4 if ystar is in the top quartile, 3 if ystar is in the second quartile, 2 if ystar is in the third quartile, and 1 if ystar is in the lowest quartile.

11. Use a multinomial logit to regress y1 on x1 and x2

12. Use an ordered logit to regress y1 on x1 and x2

Essay Questions

1. Describe how you perform an instrumental variable estimation and what tests may be used

2. Describe models that can be used for program evaluation and their pros and cons

可用中文作答，STATA部分可截图，学号后四位是1429