OBS CONS INC GENDER RACE 1 1167 18035 M W 2 12669 22809 M B 3 167 61690 M A 4 72
ID: 3221046 • Letter: O
Question
OBS
CONS
INC
GENDER
RACE
1
1167
18035
M
W
2
12669
22809
M
B
3
167
61690
M
A
4
725
10183
M
W
5
15470
19211
M
B
6
1701
55409
F
A
7
14609
24055
F
W
8
4487
70436
F
W
9
473
50671
F
W
10
2254
39002
F
B
11
2906
221000
F
A
M =Male, F = Female, W= White, B = Black, A = Asian
Fill in the table with the appropriate dummy variables to answer questions 2 and 3. Define any new variables you created in the space provided below.
Write out a regression equation for a model below which allows for gender differences in the MPC, marginal propensity to consume, which is the effect that income has on consumption.
Use a multiplicative interaction to help create a slope/intercept dummy model to explain the MPC. Be sure to define any new variables that you use in this model from your created data set. Also, be sure that you used the table to create any new variables that where needed in this model.
Use a basic model with no dummy to explain the MPC. Be sure to define any new variables that you use in this model from your created data set.
Use a dummy intercept dummy model to explain the MPC. Be sure to define any new variables that you use in this model from your created data set.
Use an interactive dummy model to explain the MPC. Be sure to define any new variables that you use in this model from your created data set.
OBS
CONS
INC
GENDER
RACE
1
1167
18035
M
W
2
12669
22809
M
B
3
167
61690
M
A
4
725
10183
M
W
5
15470
19211
M
B
6
1701
55409
F
A
7
14609
24055
F
W
8
4487
70436
F
W
9
473
50671
F
W
10
2254
39002
F
B
11
2906
221000
F
A
Explanation / Answer
Following is the complete table with dummy variables:
where, MPC= CONS/INC
Description of dummy variables:
Gender-Male: 1 if Male 0 o/w
similarly all.
The multiple linear regression summary is as follows:
Interpretation:
Intercept: On an average the MPC is 0.5 for a Black & Male category
MPC is 0.08 less for Female than Male keeping others constant
Regression with interaction:
OBS CONS INC MPC GENDER RACE GENDER-Male GENDER-Female RACE-Black RACE-White RACE-Asian 1 1167 18035 0.0647 M W 1 0 0 1 0 2 12669 22809 0.5554 M B 1 0 1 0 0 3 167 61690 0.0027 M A 1 0 0 0 1 4 725 10183 0.0712 M W 1 0 0 1 0 5 15470 19211 0.8053 M B 1 0 1 0 0 6 1701 55409 0.0307 F A 0 1 0 0 1 7 14609 24055 0.6073 F W 0 1 0 1 0 8 4487 70436 0.0637 F W 0 1 0 1 0 9 473 50671 0.0093 F W 0 1 0 1 0 10 2254 39002 0.0578 F B 0 1 1 0 0 11 2906 2E+05 0.0131 F A 0 1 0 0 1Related Questions
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