# Gary Koop and Justin L. Tobias
# "Learning about Heterogeneity in Returns to Schooling"
#  Journal of Applied Econometrics, Vol. 19, No. 7, 2004, pp. 827-849.
#
# This panel data set consists of  N=2,178 individuals. 
# The data are taken from the National Longitudinal Survey of Youth. 

# The variables are: 
# Column 1: Education (educ)
# Column 2: Log Hourly Wage (logwage) 
# Column 3: Potential Experience (exper)
# Column 4: Ability (ability)
# Column 5: Mother's Education (momeduc)
# Column 6: Father's Education (dadeduc)
# Column 7: Dummy for Residence in Broken Home (broken)
# Column 8: Number of Siblings (siblings)

data = read.table("https://hedibert.org/wp-content/uploads/2024/10/kooptobias.txt",header=TRUE)

n = nrow(data)

attach(data)


# Simple linear regression
# ------------------------

par(mfrow=c(2,2))

fit = lm(logwage ~ educ)
r2 = round(summary(fit)$adj.r.squared,3)
plot(educ,logwage,main=paste("R2 = ",r2,sep=""),xlab="Education")
abline(fit$coef,col=2,lwd=2)

fit = lm(logwage ~ exper)
r2 = round(summary(fit)$adj.r.squared,3)
plot(exper,logwage,main=paste("R2 = ",r2,sep=""),xlab="Potential experience")
abline(fit$coef,col=2,lwd=2)


fit = lm(logwage ~ ability)
r2 = round(summary(fit)$adj.r.squared,3)
plot(ability,logwage,main=paste("R2 = ",r2,sep=""),xlab="Ability")
abline(fit$coef,col=2,lwd=2)


fit = lm(logwage ~ momeduc)
r2 = round(summary(fit)$adj.r.squared,3)
plot(momeduc,logwage,main=paste("R2 = ",r2,sep=""),xlab="Mother's education")
abline(fit$coef,col=2,lwd=2)


# Multiple linear regression
# --------------------------
cor(cbind(logwage,educ,exper,ability,momeduc))

fit = lm(logwage~educ+exper+ability)

summary(fit)