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  3. 1 assume that you plan on estimating the following regression...

Question: 1 assume that you plan on estimating the following regression...

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1. Assume that you plan on estimating the following regression kids 2.28-0.98educu where kids is number of kids in the family, educ is years of education, and u is the unobserved error. (a) (10 points) What is the interpretation of the intercept? (b) (10 points) What is the interpretation of the coefficient on educ?3. Returning to the regression in equation 1: (a) (8 points) Are there omitted variables contained in u? Are any of these likely to be correlated with level of education? Explain. (b) (7 points) Can we interpret B1 as the causal effect of education on the number of children? Explain.

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