The following regression model was estimated using Excel:
GPAᵢ = α + β₁·Commerceᵢ + β₂·Artsᵢ + β₃·Scienceᵢ + εᵢ
Where:

Commerceᵢ = 1 if the student majors in Commerce, 0 otherwise

Artsᵢ = 1 if the student majors in Arts, 0 otherwise

Scienceᵢ = 1 if the student majors in Science, 0 otherwise

You receive the following Excel regression output, which includes #NUM! errors for the coefficient estimates and p-values of the Arts and Science variables. Which of the following best explains this?

Question

The following regression model was estimated using Excel:  
 GPAᵢ = α + β₁·Commerceᵢ + β₂·Artsᵢ + β₃·Scienceᵢ + εᵢ 
 Where:

Commerceᵢ = 1  if the student majors in Commerce, 0 otherwise

Artsᵢ = 1  if the student majors in Arts, 0 otherwise

Scienceᵢ = 1  if the student majors in Science, 0 otherwise

You receive the following Excel regression output, which includes  #NUM!  errors  for the coefficient estimates and p-values of the  Arts  and  Science  variables. Which of the following best explains this?

Answer

The model includes all three category dummies and a constant, which leads to redundant information

Answer

all of the above

Answer

Excel cannot estimate unique coefficients when the model has perfect overlap in information

Answer

To avoid this, one dummy variable should be left out and treated as the baseline group

Crowdly

The following regression model was estimated using Excel: GPAᵢ = α + β₁·Comme...

Want instant access to all verified answers on elearn.waikato.ac.nz?