Question

A bank must prepare for a discrimination suit filed on behalf of female employees that claim females are paid less than male employees. The bank manager sampled employee files to see if he could build a useful model for predicting salary as a function of gender and other characteristics. For each employee, the data includes salary (y, in thousands of dollars), years experience (YrsExp), years prior experience (YrsPrior), and Gender. The data is in the spreadsheet named Bank. Since Gender is a categorical variable, construct the appropriate dummy variable in column E to indicate gender as female = 1 and male = 0. You must use an "IF" statement in the appropriate cell(s) to indicate the correct dummy value based on gender.

Answer 1

In a spreadsheet named Bank, the formula =IF(D2="Female", 1, 0) applies a dummy variable in column E to indicate gender, assigning 1 for female and 0 for male, for the purpose of analyzing gender discrimination in salaries.

Step-by-step explanation:

To construct the appropriate dummy variable in column E for gender discrimination analysis, one must use an "IF" statement in Excel. For a spreadsheet named Bank with data on salary, years experience, years prior experience, and Gender, the formula would be =IF(D2="Female", 1, 0) assuming 'Female' and 'Male' are the categories listed in column D and the Gender data starts at cell D2. This formula assigns a 1 to female employees and a 0 to male employees, which can then be used for statistical analysis such as regression to predict salary as a function of gender and other characteristics.