Question

QUESTION 7 We have at our disposal a dataset corſtaining information about individual's wages, years of education, gender and race. Any person is either male or female and of one of the following race: caucasian, asian, black and latino. We study wage as a function of years of education, gender, and race. We found the following OLS estimates for Wage as the dependent variable: Bintercept - 31 ; Beduc - 17; B Female = 0.4; Basian=-2.1: B black = 2.2; Bratino - -1.3. What is the expected wage of a latino woman with 16 years of education?

Answer 1

Solution ! Given. Be intercept = 31; ß education = 17; ß female =0.4 Ñ asian: -)-1; Ⓡ black = 2.2; Blatino --143 Wlage = 16+(4:3) latino +0.4 female 717 educat +2.2 black, for unge = female =0.4, Asciano, education = 0 black = 2-2. - wage of latino women with 16 years. Expected = 31+463)*16+0.481) +2.2(1), € (Y) = Bo tÅL X 6 A B lemolo X2 + ê black X3 emale E1M)= 12.8