Program used is R Studio.Be sure to upload your final code and typed answers on Carmen. Consider the following model: log(farm revenuei) = Xiβ + i where i is an index of individual farmers in the...

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Program used is R Studio.
Be sure to upload your final code and typed answers on Carmen. Consider the following model: log(farm revenuei) = Xiβ + i where i is an index of individual farmers in the 2009/10 Uganda National Household Survey, i is an error term and Xi is a vector of explanatory variables for the i th farmer (see dataset f armdata.csv). Besides the intercept, Xi includes all variables listed in Table 1 below–excluding the dependent variable and the variable comm.



1. Do a t-test of differences of means between fertilizer adopters and non-adopters for farm revenue and the remaining independent variables. Report (in separate columns) the means of the variables along with the significance level (p-value) of the test of difference of means for fertilizer adopters and non-adopters. Briefly discuss your findings.



2. Estimate the econometric model above by ordinary least squares. Report OLS estimates of the model along with both conventional and community-level clustered (or clusterbootstrapped) standard errors in one table.



3. Implement the LASSO regularization method of variable selection and report your estimation results.



4. Implement Forward Selection approach for variable selection using the Schwarz Bayesian criterion (SBC); report your results.



5. Discuss the data (including any concerns you may have); interpret and comment on the overall results in light of econometric theory and economic intuition.













1 Variable Name Definition farmrev Annual farm revenue per hectare (local currency) farmsize Farm size (hectares) extvisits Number of extension visits agehead Age of the household head hhavgeduc Average of formal years of schooling of household members aged at least 15 educhead Years of schooling of the household head malehead Indicator variable of gender of household head (1=male) hhsize Household size (number of members 15 years or older) distance Distance to trading center (km) seedtech Indicator of adoption of high yielding seed varieties (1=adopter) fertilizer Indicator of adoption of inorganic fertilizer (1=adopter) comm Unique identifier of the farmer’s community (location) hhid Household identifier
Answered 2 days AfterJan 21, 2023

Answer To: Program used is R Studio.Be sure to upload your final code and typed answers on Carmen. Consider the...

Monica answered on Jan 24 2023
32 Votes
1. The t-statistic and the p-value, which measures the significance of the difference between the means. A low p-value (typically less than 0.05) indicates that the difference in means is statistically significant, whereas a high p-value indicates that the difference is not statistically significant. As we can see from the results, for most of the independent variable, p-value is less than 0.05, which indicates that the difference in means between fertilizer adopters and non-adopters is statistically significant. The exception is the educhead variable, where the p-value is 0.1798 which is greater than 0.05, so the difference is not statistically significant.
    Variable
    Mean (Adopters)
    Mean (Non-Adopters)
    p-value
    farmrev
    1803.030
    1206.041
    0.0006012
    farmsize
    1.363069
    0.996323
    0.02126
    extvisits
    1.3754789
    0.3893151
    0.02201
    agehead
    44.83908
    47.83288
    0.04928
    hhavgeduc
    5.733525
    4.402777
    0.01031
    educhead
    2.919540
    2.210411
    0.1798
    malehead
    0.8620690
    0.7024658
    7.642e-05
    Hhsize
    5.027907
    4.607547
    0.01385
    distance
    22.95957
    21.99588
    0.2427
    seedtech
    0.6976744
    0.5531915
    0.01051
2.
The coefficient for the variable 'farmsize' is 0.168648, which...
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