Question

5. The table below lists the average income for three WA and Oregon-OR) for states (California-CA, Washington- those without a high school degree ONOIHS), those with only a (HS) and those with a college degree (COLLEGE) NOHS HS CA $20,000 S30,000 S15,000 $32,000 $76,000 OR $19,000 531.000 $64,000 COLLEGE IST 0,000 Suppose you estimate the following regression: Income-/, + ACA + β,WA + u , where CA-I if the state is California and 0 otherwise, and WA-1 if the state is Washington and O otherwise. Average income over all three states and all three income levels i $27,667. What are the estimates for βι and A? β You are also interested in estimating the effects of education on income and you estimate the model a. -13333 9661 . A:t渳 ,A-4 andA?A+ What are the estimates for A and ß, ? А--9 661 What are the estimates forA You combine the data for state of residence and education to predict income. ppd +0 ( 'r What does the estimate of the intercept term, βο , correspond to? ㄧ-A A+--A+ what are the estimates?A+,

Answer 1