Suppose you estimate a regression equation Income = α + β1Experience + β2Business + β3Gender + β4Private + β5Experience*Gender + ε Income - annual income is in thousands of dollars (1 unit of income = $1000); Experience is in years; Business is a dummy variable set to 1 if person has a business degree, 0 otherwise; Gender is a dummy variable set to 1 for females, 0 for males; Private is a dummy variable set to 1 if a person attended private college, 0 otherwise; The data are on individuals who graduated from college within last 10 years. 1.) A. Use information from Question 1 . What is the average income of males with non-business degree, who went to public college, and who have 3 years of experience? (to 3 decimal points) B. Use information from Question 1 What is the average income of females with non-business degree, who went to public college, and who have 6 years of experience? (to 3 decimal points) C. Use information from Question 1. Which of the following statements is a correct interpretation of the slope dummy Experience*Gender? A. It shows that with each additional year of experience, females earn less. B. It measures the effect of gender on experience. C. It shows how much less females earn on average, regardless of their experience or education. D. It shows how the effect of experience differs between males and females.
Suppose you estimate a regression equation
Income = α + β1Experience + β2Business + β3Gender + β4Private + β5Experience*Gender + ε
Income - annual income is in thousands of dollars (1 unit of income = $1000);
Experience is in years;
Business is a dummy variable set to 1 if person has a business degree, 0 otherwise;
Gender is a dummy variable set to 1 for females, 0 for males;
Private is a dummy variable set to 1 if a person attended private college, 0 otherwise; The data are on individuals who graduated from college within last 10 years.
1.) A. Use information from Question 1 .
What is the average income of males with non-business degree, who went to public college, and who have 3 years of experience? (to 3 decimal points)
B. Use information from Question 1
What is the average income of females with non-business degree, who went to public college, and who have 6 years of experience? (to 3 decimal points)
C. Use information from Question 1.
Which of the following statements is a correct interpretation of the slope dummy Experience*Gender? A. It shows that with each additional year of experience, females earn less. B. It measures the effect of gender on experience. C. It shows how much less females earn on average, regardless of their experience or education. D. It shows how the effect of experience differs between males and females.
D.
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Use information from Question 1.
Suppose you wanted to find out if experience has a different effect on business majors vs. other majors. What variable would you need to add to the regression equation?
A. Experience*Business
B. Experience-squared
C. Experience/Business
D. (Experience - Business)
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