Question

Using 50 observations, the following regression output is obtained from estimating y = β0 + β1x + β2d1 + β3d2 + ε. Coefficients Standard Error t Stat p-value Intercept −0.81 0.36 −2.25 0.0293 x 2.94 1.20 2.45 0.0182 d1 −13.00 16.25 −0.80 0.4278 d2 5.52 1.50 3.68 0.0006 a. Compute yˆ for x = 262, d1 = 1, and d2 = 0; compute yˆ for x = 262, d1 = 0, and d2 = 1. (Round your answers to 2 decimal places.) yˆ x = 262, d1 = 1 and d2 = 0 x = 262, d1 = 0 and d2 = 1

Answer 1

The answer is "789.03 and 806.16".

Explanation:

`y\^ \ \ = -0.45 + 3.78(x) -11.88(d_1) + 5.25(d_2)`

For point a:

Calculating the value for
`y\^ \ \ x = 212,\ \ d_1 = 1, and \ \ d_2 = 0`

`y\^ = -0.45 + 3.78(212) -11.88(1) + 5.25(0)`

`= -0.45 + 801.36 -11.88 + 0\\\\= 789.03`

For point b:

Calculating the value of
`y\^ \ \ for \ \ x = 212, \ \ d_1 = 0, and \ \ d_2 = 1`

`y\^ = -0.45 + 3.78(212) -11.88(0) + 5.25(1)`

`= -0.45 + 801.36 -0 + 5.25\\\\= 806.16`