Question: For equation (4.23) EARN = + FFEMALE + BBLACK + HHISPANIC + u Show that (a) E(Earnings/Hispanic Female) = + F + H;

For equation (4.23)

EARN = α + βFFEMALE + βBBLACK + βHHISPANIC + u Show that

(a) E(Earnings/Hispanic Female) = α + βF + βH; also E(Earnings/Hispanic Male) = α + βH.
Conclude that βF = E(Earnings/Hispanic Female) – E(Earnings/Hispanic Male).

(b) E(Earnings/Hispanic Female) – E(Earnings/White Female) = E(Earnings/Hispanic Male) –
E(Earnings/White Male) = βH.

(c) E(Earnings/Black Female) – E(Earnings/White Female) = E(Earnings/Black Male) –
E(Earnings/White Male) = βB.

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