In examining the determinants of income, data were collected regarding the characteristics of 45 adults, and the regression Y = β 0 + β 1 X 1 + β 2 X 2 + β 3 X 3 +ε was used, where Y is the annual income (in thousands of dollars), X 1 is the person's age, X 2 is his/her years of education, and X 3 is a dummy variable = 1 if the adult is female.
If you get y^ = 26.3 + 1.38 x 1 + 2.98 x 2 - 0.76 x 3 when you run the regression, how would you interpret the coefficient on gender?

Question

In examining the determinants of income, data were collected regarding the characteristics of 45 adults, and the regression  Y  =  β 0   +  β 1 X 1   +  β 2 X 2   +  β 3 X 3   +ε was used, where  Y  is the annual income (in thousands of dollars),  X 1   is the person's age,  X 2   is his/her years of education, and  X 3   is a dummy variable = 1 if the adult is female. 
    If you get   y^   = 26.3 + 1.38 x 1   + 2.98 x 2   - 0.76 x 3   when you run the regression, how would you interpret the coefficient on gender?

Answer

A woman earns 76% of a man's earnings.

Answer

For each additional year in the age, a woman earns $760 less than a man.

Answer

For each additional year of education, a woman earns $760 less than a man.

Answer

On average, a woman earns $760 less than a man.

Crowdly

In examining the determinants of income, data were collected regarding the chara...

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