Does the intercept coefficient have a meaningful interpretation?

Does the intercept coefficient have a meaningful interpretation?

Stata file Growth.dta contains contains data on average growth rates over 1960-1995 for 65
countries, along with variables that are potentially related to growth. These data were provided
by Professor Ross Levine of Brown University and were used in his paper with, Thorsten Beck
and Norman Loayza “Finance and the Sources of Growth” Journal of Financial Economics,
2000, Vol. 58, pp. 261- 300.
Using this dataset, we would like to study determinants of GDP growth rate.

Variable Definition
Country_name Name of country

growth Average annual percentage growth of real Gross Domestic Product (GDP)* from 1960 to 1995.

rgdp60 The value of GDP* per capita in 1960, converted to 1960 US dollars

yearsshcool Average number of years of schooling of adult residents in that country in 1960

1) Report a summary table where you have the mean, median, standard deviation, etc. of the
outcome variable (growth) and the explanatory variables listed above (rgdp60 and
yearsschool). Interpret these results.
2) Construct a scatterplot of average annual growth rate of real GDP on the variable rgdp60.
Does there appear to be a relationship between the variables?
3) Run a regression of growth on rgdp60.
a) Comment on the sign, magnitude and the significance of the slope coefficient.
b) Does the intercept coefficient have a meaningful interpretation?
c) Provide an economic interpretation to this regression model.
4) Construct a scatterplot of average annual growth rate of real GDP on the variable
yearsschool. Does there appear to be a relationship between the variables?
5) Run a regression of growth on yearsschool.
a) Comment on the sign, magnitude and the significance of the slope coefficient.
b) Does the intercept coefficient have a meaningful interpretation


 

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