Dummy variables take the value of 0 or 1 and allow qualitative factors to be represented...

 

 

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Dummy variables take the value of 0 or 1 and allow qualitative factors to be represented in linear regression. For purposes of this question, imagine that the annual wage (in $1,000 ) of a person with a bachelors degree (Wi) is estimated as a function of their age (Ai) and whether or not they took a course in economics (Ei): Imagine that the estimated coefficients in the above model were Wi = Bo + B1Ai + B2Ei +Ei E =1 took economics course, 0 other wise Wi = 12.0 + 1.5*A; + 3.2*E; Calculate what the estimated coefficients would be if the economics dummy were replaced with a "didn't take economics" dummy. Dummy variables take the value of 0 or 1 and allow qualitative factors to be represented in linear regression. For purposes of this question, imagine that the annual wage (in $1,000 ) of a person with a bachelors degree (Wi) is estimated as a function of their age (Ai) and whether or not they took a course in economics (Ei): Imagine that the estimated coefficients in the above model were Wi = Bo + B1Ai + B2Ei +Ei E =1 took economics course, 0 other wise Wi = 12.0 + 1.5*A; + 3.2*E; Calculate what the estimated coefficients would be if the economics dummy were replaced with a "didn't take economics" dummy.

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Not taken course Ei 0 Taken an economics course Ei 1 Ki 1 n... View the full answer