Q2 () In order to avoid dummy variable trap, we can either include (m-1) dummy variables into the model or regress a model without intercept but with m dummy variables. Which approach is more preferable? Discuss (10 marks) (b) To find out what factors determine whether or not a person becomes a smoker, Geny obtained data on 1196 individuals. For each individual, there is Information on age (in years), education in years of schooling, and income in RM thousand per month) in 2019. The dependent variable is smoker, with 1- smoker and nonsmoker. For comparative purposes, the results based on Linear Probability Model (LPM), logit, and probit models are presented in a tabular formas lielow: Figure 2: Regression results of LPM Lagit, and Probit Vanales LPM lon Prahir Constant 1123 2.745 (1596) (8.31) Age -ODOS onci -0.013 (-5.703 -5.66) Education -0.021 ORI (4471 409 Income 0,033 1047 0027 Note Figures in the Nethese areas for LM and rains for logit and probat Answer the following questions are the the models in Figure 2 Interpret the cent of Education Isegic i esplaining the likeliholofing a smoker! Compute the produced by the respondents do years old whe lunding school for 15 years and with income Q2 () In order to avoid dummy variable trap, we can either include (m-1) dummy variables into the model or regress a model without intercept but with m dummy variables. Which approach is more preferable? Discuss (10 marks) (b) To find out what factors determine whether or not a person becomes a smoker, Geny obtained data on 1196 individuals. For each individual, there is Information on age (in years), education in years of schooling, and income in RM thousand per month) in 2019. The dependent variable is smoker, with 1- smoker and nonsmoker. For comparative purposes, the results based on Linear Probability Model (LPM), logit, and probit models are presented in a tabular formas lielow: Figure 2: Regression results of LPM Lagit, and Probit Vanales LPM lon Prahir Constant 1123 2.745 (1596) (8.31) Age -ODOS onci -0.013 (-5.703 -5.66) Education -0.021 ORI (4471 409 Income 0,033 1047 0027 Note Figures in the Nethese areas for LM and rains for logit and probat Answer the following questions are the the models in Figure 2 Interpret the cent of Education Isegic i esplaining the likeliholofing a smoker! Compute the produced by the respondents do years old whe lunding school for 15 years and with income