Question: Please help me with solving questions (d) and ( e) Provide the steps to get to the final solution. THANKS a lot! A large university

Please help me with solving questions (d) and (e) Provide the steps to get to the final solution. THANKS a lot!

Please help me with solving questions (d) and (e) Provide the stepsto get to the final solution. THANKS a lot! A large university

A large university keeps track of its students when they enter the labor market after leaving school. Specically, they collect data on their studentsI starting salaries (in thousands of US. dollars), gender, and whether the student graduated from a STEM (science, technology, engineering, maths) eld. These variables are denoted inc, male, and stem, respectively. The following model is then estimated using OLS inc,- = o+1mciei +u.-. (1) (a) Take the expectation of equation [1) conditional on male = 1 and male = 0 (one at a time). What is $1 equal to? How do you interpret .81? "lb account for the fact that there is a higher demand for STEM graduates, and that the graduates from these elds tend to end up at jobs with higher salaries, a researcher wanted to change the model specication. To nd out whether graduating from a STEM eld is more benecial for men than for women, the following model was estimated using OILS inc,- = u + lmcle, + Eastern,- + 3mole, x stem,- + m. (2) The following results were obtained inc,- = 24.5 + 2.17mele, + 4.69.stem,- 1.4maie, x stem. (3) (d) Calculate the average effect of a change in male on inc based on equation (3) and interpret your result. (e) Calculate the average effect of a change in stem on inc based on equation (3) and interpret your result

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