Consider the population regression of log earnings [Y;, where Y,= In(Earnings,;)] against two binary variables: whether a worker is married (D₁, where D₁;= 1 if the th person is married) and theworker's gender (D2;, where D₂;= 1 if the th person is female), and the product of the two binary variables Y₁ = Po+B₁D₁+P₂D2i + P3 (D₁¡ × D₂i) + Hi-The interaction term:O A. indicates the effect of being married on log earnings.B. does not make sense since it could be zero for married males.C. allows the population effect on log earnings of being married to depend on gender.D. cannot be estimated without the presence of a continuous variable.

Econometrics is used to explain economic phenomena using inferences from statistics, economic…

Consider the population regression of log earnings [Y₁, where Y,= In(Earnings;)] against two binary variables: whether a worker is married (D₁, where D₁ = 1 if the person is married) and the worker's gender (D2), where D₂ = 1 if the th person is female), and the product of the two binary variables Y₁ = Po + B₁ D₁1 + P₂D21+P3 (D₁1XD₂1) + Hi- The interaction term: OA. indicates the effect of being married on log earnings. B. does not make sense since it could be zero for married males. OC. allows the population effect on log earnings of being married to depend on gender. OD. cannot be estimated without the presence of a continuous variable.

Consider the population regression of log earnings [Y₁, where Y,= In(Earnings;)] against two binary variables: whether a worker is married (D₁, where D₁ = 1 if the person is married) and the worker's gender (D2), where D₂ = 1 if the th person is female), and the product of the two binary variables Y₁ = Po + B₁ D₁1 + P₂D21+P3 (D₁1XD₂1) + Hi- The interaction term: OA. indicates the effect of being married on log earnings. B. does not make sense since it could be zero for married males. OC. allows the population effect on log earnings of being married to depend on gender. OD. cannot be estimated without the presence of a continuous variable.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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