Consider the following model: Y; = B1+ B2D2; + B3D3 + B4 (D2; D3;) + B3X;...

 

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Consider the following model: Y; = B1+ B2D2; + B3D3¡ + B4 (D2; D3;) + B3X; + u; where Y= the annual salary of a college teacher X= years of teaching experience D2=1 if male = 0 if otherwise D3 =1 if white = 0 if otherwise a. The term (D2D3) represents the interaction effect. What does this expression mean? b. What is the meaning of B4? c. Find E(Y;|D2= 1, D3 = 1, X;) and interpret it. Consider the following model: Y; = B1+ B2D2; + B3D3¡ + B4 (D2; D3;) + B3X; + u; where Y= the annual salary of a college teacher X= years of teaching experience D2=1 if male = 0 if otherwise D3 =1 if white = 0 if otherwise a. The term (D2D3) represents the interaction effect. What does this expression mean? b. What is the meaning of B4? c. Find E(Y;|D2= 1, D3 = 1, X;) and interpret it.