A problem of interest to health officials (and others) is to determine the effects of smoking
during pregnancy on infant health. One measure of infant health is birth weight; a birth rate
that is too low can put an infant at risk for contracting various illnesses. Since factors other
than cigarette smoking that affect birth weight are likely to be correlated with smoking, we
should take those factors into account. For example, higher income generally results in access
to better prenatal care, as well as better nutrition for the mother. An equation that recognizes
this is:
bwght = β0 + β1 · cigs + β2 · f aminc + u
with bwght birth weight, ounces; cigs cigs smoked per day while pregnant; faminc 1988
family income, $ 1000s
(a) What are the most likely signs for β1 and β2?
(b) Do you think cigs and faminc are likely to be correlated? Explain why the correlation
might be positive or negative.
(c) Now estimate the equation with and without faminc, using the data in "pc2 01.xls".
Report the results in equation form, including the sample size and R2. Discuss your results, focusing on whether adding faminc substantially changes the estimated effect of cigs on bwght.