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 m...View Answer
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