Financial Innovation Exercise 1

install.packages("woolridge")

## Installing package into '/cloud/lib/x86_64-pc-linux-gnu-library/4.4'
## (as 'lib' is unspecified)

## Warning: package 'woolridge' is not available for this version of R
## 
## A version of this package for your version of R might be available elsewhere,
## see the ideas at
## https://cran.r-project.org/doc/manuals/r-patched/R-admin.html#Installing-packages

library(wooldridge)
data("bwght")

## [1] "C2i"

## [1] 665

## [1] 112

## [1] "C2ii"

## [1] 2.087176

## [1] "Using average of all woman or all participants in this case is not very precise. Because it includes women who don't smoke and men. So in order to find the accurate average of cigarretes smoked per women who smoke, we have to find the average of only women who smoke."

## [1] "C2iii"

## [1] 12.41071

## [1] "As I have stated earlier, the value differs a lot."

## [1] "C2iv"

## [1] "While calculating average fatheduc,  we have to take the value of fathers with no education as 0 or completely exclude them."

## [1] 11.32421

## [1] 13.18624

## [1] "C2v"

## [1] 29.02666

## [1] 18.73928

## [1] "C3i"

## [1] 100

## [1] 0

## [1] "No it doesn't make sense. Maybe schools with 100 pass rate might teaching very simple and easy math. And in reverse for the 0 pass rates. Or they just let the student pass with bribery. Unless this happens these numbers don't make sense."

## [1] "C3ii"

## [1] 38

## 2.084476 %

## [1] "C3iii"

## [1] 17

## [1] "C3iv"

## [1] 60.06188

## [1] 71.909

## [1] "According to these numbers math exam is easier to pass."

## [1] "C3v"

## [1] 0.8427281

## [1] "It seems datas math4 and read4 have strong correlation between them. To conclude, students in 4th grade might have problem with maths if they are bad at reading and wise versa."

## [1] "C3vi"

## [1] 5194.865

## [1] 1091.89

## [1] "According to these results, there is a very high standard deviation of 1000$. That means there is a lot of difference between schools expenditure per pupil."

## [1] "C3vii"

## [1] "The calculations yield the following results:\n\nPercentage by which School A's spending exceeds School B's spending: approximately 9.09%.\nApproximation based on the difference in natural logs: approximately 8.70%.\nThus, School A spends about 9.09% more per student than School B, while the logarithmic approximation suggests a difference of about 8.70%."