Use the data in HAPPINESS.RAW for this question. See also Computer Exercise C15 in Chapter 13.

1. (i) Estimate a probit probability model relatingvhappytooccattendandregattend, and include a full set of year dummies. Find the average partial effects foroccat- tendandregattend. How do these compare with those from estimating a linear probability model?
2. (ii) Define a variable,highinc, equal to one if family income is above $25,000. Includehighinc,unem10,educ, andteensto the probit estimation in part (ii). Is the APE ofregattendaffected much? What about its statistical significance?
3. (iii) Discuss the APEs and statistical significance of the four new variables in part (ii). Do the estimates make sense?
4. (iv) Controlling for the factors in part (ii), do there appear to be differences in happi- ness by gender or race? Justify your answer.
Attachments:
1. How does the DD schedule shift if there is a decline in investment demand? 2. Suppose there is a permanent fall in private aggregate demand for a country’s output (a downward shift of the entire aggregate demand schedule). What is the effect on output? What government policy response would you recommend? 3. A new government is elected and announces that once it is inaugurated, it will increase the money supply. Use the DD-AA model to study the economy’s response to this announcement.
During the current COVID-19 pandemic many countries have imposed quarantine on their
populations in order to limit/ stop the spread of the disease and avoid overload on the health
system. While these measures are justified from the health perspective, they have major economic
consequences. In this assignment you are asked to analyse different economic aspects related to the