Suppose that a researcher, using wage data on 258 randomly salected male workers

Question

Suppose that a researcher, using wage data on 258 randomly salected male workers and 288 female workers, estimates the OLS regression Wage-12.896 + 2184 x Male, R-005. SERs4.3. (0.2369) (0.3708) where Wage is measured in dollars per hour and Male is a binary variable that is equal to 1 if the person is a male and 0 if the person is a female. Define the wage gender gap as the difference in mean earnings between men and women. What is the estimatedgender gap? The estimated gender gap equals per hour. (Round your response to three decimal places) The null and alternative hypotheses ae H: 0 versus H:Pi 0. The t-statistic for testing the null hypothesis that there is no gender gap is Round your response to two decimal places) The p-value for testing the null hypothesis that there is no gender gap is(Round your response to four decimal places.) The estimated effect of gender gap is statistically significant at the: 1.5% level IL 1% level ll. 0.01%level OA. I, II, and II. B. Ill nly O C. Ionly D. land I

Explanation / Answer

Answer to question# 1)
Wage(for males) = 12.896 +2.184*1 = 15.08

Wage for females = 12.896 + 2.184 *0 = 12.896

.

Difference in wages = 15.08 -12.896 = 2.184

.

t = slope / standard error

Slope = 2.184

Standard error = 0.3708

t = 2.184/0.3708 = 5.8897

.

P value = 0.0000 (use the T value and df = 540)

.

Since the p value obtained is < 5%, 1% and 0.01%

it is significant at all three levels

Hence correct answer choice is : A

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