# Expert Answer:Introduction to Econometrics

Answer & Explanation:We are interested in measuring the returns to an extra year of experience on wages. Consider the following wage equation:𝑤𝑎𝑔𝑒 = 𝛽0 + 𝛽1edu + 𝛽2exper + u (1)Where wage is hourly wage in pounds, edu is year of education, exper is years of work experience, and u is the unobservable. We estimate the model with a sample of 950 employees, aged 25 […]