Yi = 0 + 1Xi + 2D2i + 3D3i +ui Where Y = annual earnings of MBA
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Question:
Yi = β0 + β1Xi + β2D2i + β3D3i +ui
Where
Y = annual earnings of MBA graduates.
X = years of service.
D2 = 1 if Harvard MBA,
= 0 otherwise.
D3 = 1 if Wharton MBA,= 0 otherwise. Find
What are the expected signs of the various coefficients?
How would you interpret β2 and β3?
If β2 > β3, what conclusion would you draw? (30 per cent)
Assume that a Harvard MBA graduate with 20 years of service/experience, what is his estimated annual income?
Related Book For
College Mathematics for Business Economics Life Sciences and Social Sciences
ISBN: 978-0321614001
12th edition
Authors: Raymond A. Barnett, Michael R. Ziegler, Karl E. Byleen
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