QUESTION 1 Answer the following questions using the output below for the model:

Question

QUESTION 1 Answer the following questions using the output below for the model: wo ge = 0 + 1 education + 2 ema e + u where wage-hourly wage si our : education-years of education: female+ 1 if female, 0 male reg wage education female Source MS Number of obs1200 2, 1197 )-57 .07 -0.0000 -0.0871 Adj R-squared-0.0855 -7.3293 df Hodel 6131.27283 64302.0296 1197 53.719323 2 3065.63642 Prob F R-squared Residua Total70433.3024 1199 58.7433715 Root MSE wage [959 ConE. Intervall education 781112622 7.96 .000 667227 1.103808 4242778-7.66 .000-4.081039-2.416217 3.3318a 885517a Eemale.248628 5535283 1416119 0.39 0. 696-2.224823 Which of the following is the best interpretation of#2? O For each one unit increase in female, wage decreases by $3.25/hour on average On average, females eam $3.25hour less than males with similar education levels. Being female decreases wage by $3.25hour on average Being female decreases wage by $3.25 hour if education is zero years.

Explanation / Answer

Solution :

The coffecient for femal is -3.248

Thus, if the female value is substituted in our equation. There will decrease in wages by 3.25/hour on average

Thus option 3 is correct ( Being female decrease wages by 3.25/hour on average

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