Using 20 observations, the following regression output is obtained from estimating y = 0 + 1x +

Using 20 observations, the following regression output is obtained from estimating y = β0 + β1x + β2d + β3xd + ɛ.

a. Compute Ŷ for x = 10 and d = 1; then compute Ŷ for x = 10 and d = 0.
b. Are the dummy variable d and the interaction variable xd individually significant at the 5% level? Explain.

Transcribed Image Text:

Standard Coefficients Error 13.i 4.62 -5.15 2.09 3.31 0.56 4.97 0.79 t Stat p-Value 4.09 0.0009 8.31 0.0000 04 0.3156 2.64 0.0178