Consider Example 7.11, where, prior to computing the interaction between the race/ethnicity of a player and the
Question:
Consider Example 7.11, where, prior to computing the interaction between the race/ethnicity of a player and the city’s racial composition, we center the city composition variables about the sample averages, percblck and perchisp (which are, approximately, 16.55 and 10.82, respectively). The resulting estimated equation is
(i) Why are the coefficients on black and hispan now so much different than those reported in equation (7.19)? In particular, how can you interpret these coefficients?
(ii) What do you make of the fact that neither black nor hispan is statistically significant in the above equation?
(iii) In comparing the above equation to (7.19), has anything else changed? Why or why not?
Step by Step Answer:
Introductory Econometrics A Modern Approach
ISBN: 9781337558860
7th Edition
Authors: Jeffrey Wooldridge