Question: Use the data for the year 1990 in INFMRT for this exercise. (i) Reestimate equation (9.43), but now include a dummy variable for the observation

Use the data for the year 1990 in INFMRT for this exercise.

(i) Reestimate equation (9.43), but now include a dummy variable for the observation on the District of Columbia (called DC). Interpret the coefficient on DC and comment on its size and significance.

(ii) Compare the estimates and standard errors from part (i) with those from equation (9.44). What do you conclude about including a dummy variable for a single observation?

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