Essay
You have estimated an earnings function, where you regressed the log of earnings on a set of continuous explanatory variables (in levels)and two binary variables, one for gender and the other for marital status. One of the explanatory variables is education.
(a)Interpret the education coefficient.
(b)Next, specify the binary variables and an equation, where the default is a single male, without allowing for interaction between marital status and gender. Indicate the coefficients that measure the effect of a single male, single female, married male, and married female.
(c)Finally allow for an interaction between the gender and marital status binary variables. Repeat the exercise of writing down the various effects based on the female/male and single/married status. Why is the latter approach more general than the former?
Correct Answer:

Verified
(a)The coefficient on education gives yo...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q50: Labor economists have extensively researched the
Q51: In the regression model Y<sub>i</sub> = β<sub>0</sub>
Q52: In the model ln(Y<sub>i</sub>)= ?<sub>0</sub> +
Q53: The interpretation of the slope coefficient in
Q54: The interpretation of the slope coefficient in
Q56: There has been much debate about
Q57: Being a competitive female swimmer, you
Q58: You have estimated the following equation:
Q59: The textbook shows that ln(x +
Q60: An example of the interaction term between