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Consider the following estimated regression with a sample of size n=50: AHE = -2.44 – 1.57 • DFemale + 0.27 • DMarried + 0.59 ▪ Educ + 0.04 * Exper, where AHE indicates average hourly earning of the individual, DFemale is a dummy variable indicating gender, DMarried is a dummy variable indicating marital status, Educ indicates the individual's education level, and Exper the level of work experience. A plot of the squared residuals against the fitted values of AHE is shown in the following figure. The followings are the possible explanation for the pattern in this plot, with the exception that

Consider the following estimated regression with a sample of size n=50: AHE = -2.44 – 1.57 • DFemale + 0.27 • DMarried + 0.59 ▪ Educ + 0.04 * Exper, where AHE indicates average hourly earning of the individual, DFemale is a dummy variable indicating gender, DMarried is a dummy variable indicating marital status, Educ indicates the individual's education level, and Exper the level of work experience. A plot of the squared residuals against the fitted values of AHE is shown in the following figure. The followings are the possible explanation for the pattern in this plot, with the exception that

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
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Consider the following estimated regression with a sample of size n=50: AHE = -2.44 – 1.57 * DFemale + 0.27 * DMarried + 0.59 * Educ + 0.04 * Exper, where AHE indicates average hourly earning of the individual, DFemale is a dummy variable indicating gender, DMarried is a dummy variable indicating marital status, Educ indicates the individual's education level, and Exper the level of work experience. A plot of the squared residuals against the fitted values of AHE is shown in the following figure. The followings are the possible explanation for the pattern in this plot, with the exception that
Transcribed Image Text:Consider the following estimated regression with a sample of size n=50: AHE = -2.44 – 1.57 * DFemale + 0.27 * DMarried + 0.59 * Educ + 0.04 * Exper, where AHE indicates average hourly earning of the individual, DFemale is a dummy variable indicating gender, DMarried is a dummy variable indicating marital status, Educ indicates the individual's education level, and Exper the level of work experience. A plot of the squared residuals against the fitted values of AHE is shown in the following figure. The followings are the possible explanation for the pattern in this plot, with the exception that
A. the parents' levels of education have a changing variance across individuals. B. other omitted variables have changing variance across individuals. C. the variable AHE has a skewed distribution. D. the level of education might be related to the individual's parents' levels of education.
Transcribed Image Text:A. the parents' levels of education have a changing variance across individuals. B. other omitted variables have changing variance across individuals. C. the variable AHE has a skewed distribution. D. the level of education might be related to the individual's parents' levels of education.
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