The data set project.raw contains 3563 observations drawn from the Merged Outgoing Rotation

Group file of the 1999 Current Population Survey with the following variables:

Lnwage = log of hourly wage

Yreduc = years of education

Age16 = age – 16

Age16sq = Age16 squared

Female = dummy, =1 if female, =0 if male

Race = dummy, =1 if Caucasian, =2 if African-American

To upload the data set into Stata, issue the following command from the command window:

In file Lnwage Yreduc Age16 Age16sq Female Race using "where ever you save the data

set\project.raw"

Before running any of the following regressions, create a dummy variable AfAm that equals 1 if the person is African-American and 0 if the person is Caucasian. To crate the dummy variable, issue the following commands: generate AfAm = 1 replace AfAm = 0 if Race == 1

Create a new variable ya = yreduc*age16. Regress Lnwage on Yreduc, Age16, Female,

AfAm, and ya (note: omit Age16sq). What do we learn from this regression?