Table 11.

LASSO Regression Dependent Variable: Standardized HOME Scores

Variable	Both Forms		Subjective Probability		Age Range
	CV	Adaptive	CV	Adaptive	CV	Adaptive
μi,ψ,1			x		x
μi,ψ,2	x	x	x	x	x	x
μi,ψ,3

Notes: This table shows the MSE parameters that are included in the final prediction model, as estimated by LASSO regressions. The dependent variable is the measure of investment (the Home Observation for the Measurement of the Environment – HOME scores). The explanatory variables are the MSE parameters; a dummy variable takes the value of 1 if the mother’s year of birth is between 1978 and 1987 and 0 otherwise; a dummy variable takes the value of 1 if the mother’s year of birth is between 1988 and 1997 and 0 otherwise; a dummy variable takes the value of 1 if the mother is Hispanic and 0 otherwise; a dummy variable takes the value of 1 if the mother is non-Hispanic black and 0 otherwise; a dummy variable takes the value of 1 if the mother has at least a college degree and 0 otherwise; a dummy variable takes the value of 1 if the mother is married and 0 otherwise; a dummy variable takes the value of 1 if the maternal score on the CESD is greater than or equal to 16 and 0 otherwise; three dummy variables indicate the level of household income. We find that the MSE parameter about the elasticity of child development with respect to investment - μ_i,ψ,2 – consistently predicts variation in the HOME score and is included in the LASSO models.

^*p < 0.10,

^**p < 0.05,

^***p < 0.01