Essay
You have collected data on individuals and their attributes. Consequently you have generated several binary variables, which take on a value of "1" if the individual has that characteristic and are "0" otherwise. One example is the binary variable DMarr which is "1" for married individuals and "0" for non-married variables. If you run the following regression:
ahei= β0 + β1×educi + β2×DMarri + ui
a. What is the interpretation for β2?
b. You are interested in directly observing the effect that being non-married ("single")has on earnings, controlling for years of education. Instead of recording all observations such that they are "1" for a not married individual and "0" for a married person, how can you generate such a variable (DSingle)through a simple command in your regression program?
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a. The coefficient will tell you by how ...View Answer
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