You estimate the following quadratic sample regression function: Daily Earnings_hat = 450 + 50Education - 2Education^2 Assuming this relationship is causal, what do these estimates suggest about the marginal return to a year of education?

You estimate the following quadratic sample regression function: Daily Earnings_hat = 450 + 50Education - 2Education^2 Assuming this relationship is causal, what do these estimates suggest about the marginal return to a year of education?

Naim 10:25

You estimate the following quadratic sample regression function:
Daily Earnings_hat = 450 + 50Education - 2Education^2
Assuming this relationship is causal, what do these estimates suggest about the marginal
return to a year of education?



A. It is increasing with education.
B. It is decreasing with education.
C. It is constant.
D. None of the above.


Answer: B. It is decreasing with education.


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