Question

Use the following regression results to answer the remaining questions. Y measures average hourly earnings AHE in U.S. dollars for each individual, X1 (College) is a binary variable that is 1 if a person has a college degree and 0 if not, X2 (Female) is a binary variable that is 1 if a person is female and 0 if a person is not female, X3 (Experience) is a continuous variable for years of experience, and X4 (Experience2) is the quadratic term of Experience.

Regressor Dependent variable:
Average hourly earnings (AHE)
College (X) 4.50****
(0.22)
Female X) -2.50****
(0.22)
Experience X 1.2*****
(0.04)
Experience -0.02****
(0.001)
Intercept 11.50****
(1.18)
Deja is a female college graduate with 4 years in work experience. What's the expected change in the average hourly earnings (AHE) associated with an additional year of experience for Deja?

Answer 1

Check the explanation

Explanation:

Y = 11.5 + 4.5*X1 -2.5*X2 +0.7*X3+1.6*X4 -2.4*X5 -2.8*X6

FOR JANE

X1 =1 , X2 =1 , X3 =5 , X4 =0 ,X5=0, X6=1

SO,

Y =11.5+(4.5*1)-(2.5*1)+(0.7*5)+0+0-(2.8*1)

= 14.2

..........................

FOR Sophie

X1 =1 , X2 =1 , X3 =10 , X4 =1 ,X5=0, X6=0

so,

Y =11.5+(4.5*1)-(2.5*1)+(0.7*10)+ (1.6*1)+0+0

= 22.1