Business, 25.02.2020 17:38, arnold2619

The median starting salary for new law school graduates is determined bylog(salary) = B0 + B1 LSAT + B2 GPA + B3 log(libvol) + b4 log(cost)+ B5 rank + u, where LSAT is the median LSAT score for the graduating class, GPA is the median collegeGPA for the class, libvol is the number of volumes in the law school library, cost is the an-nual cost of attending law school, and rank is a law school ranking (with rank = 1 beingthe best).(i) Explain why we expect b5 < 0.(ii) What signs do you expect for the other slope parameters? Justify your answers.(iii) Using the data in LAWSCH85.RAW, the estimated equation is^ log(salary ) = 8.34 + .0047 * LSAT + .248 GPA + .095 log(libvol)+ .038 log(cost) - .0033 rankn = 136, R^2 = .842.What is the predicted ceteris paribus difference in salary for schools with a medianGPA different by one point? (Report your answer as a percentage.)(iv) Interpret the coefficient on the variable log(libvol).(v) Would you say it is better to attend a higher ranked law school? How much is adifference in ranking of 20 worth in terms of predicted starting salary?

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The median starting salary for new law school graduates is determined bylog(salary) = B0 + B1 LSAT +...