The model below relates an individual's wage to a number of variables: wage, Bo + Bmarried;...

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The model below relates an individual's wage to a number of variables: wage, Bo + B₁married; + B₂educ; + B3exper; + Baexpersq; + ₁. = Here wage, is the wage of the ith individual, married, is a dummy variable, taking a value of 1 if the ith individual is married, educ, is their years of education completed, exper, is their years of experience and expersq, is its square. (a) Explain how a t-test can be used to test the null hypothesis that an extra year of education has the same effect as being married on the wage of an individual. [10 MARKS] (b) Describe how you can test whether or not the level of experience of the ith individual has any impact on their wage, based on the model presented above. The model below relates an individual's wage to a number of variables: wage, Bo + B₁married; + B₂educ; + B3exper; + Baexpersq; + ₁. = Here wage, is the wage of the ith individual, married, is a dummy variable, taking a value of 1 if the ith individual is married, educ, is their years of education completed, exper, is their years of experience and expersq, is its square. (a) Explain how a t-test can be used to test the null hypothesis that an extra year of education has the same effect as being married on the wage of an individual. [10 MARKS] (b) Describe how you can test whether or not the level of experience of the ith individual has any impact on their wage, based on the model presented above.

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a To test the null hypothesis that an extra year of education has the same effect as being married o... View the full answer