Question: 1.We estimated a linear model (shown below) with interaction terms. Spending = a + b * ln(salary) + c * gender + d * ln(salary)
1.We estimated a linear model (shown below) with interaction terms.
Spending = a + b * ln(salary) + c * gender + d * ln(salary) * gender + e,
where gender is a binary variable which is set to 1 if the current observation is from a male object (0 otherwise). We use the estimated model to draw the relationship between the spending and ln(salary), and here is what we get (view attachment).
Please infer the signs of the parameters (if the estimated a, b, c, and d are positive or negative)?

Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
