In: Economics
You want to develop a regression model about the 2004 presidential election. The objective is to explain percentage of votes received by the Democratic candidate in each state. The explanatory variables are:
(i) unemployment rate in each state,
(ii) gender dummy (female =1 and male = 0),
(iii) a dummy variable for Bill Clinton’s appearance in the state to campaign,
(iv) an interaction term between the
gender dummy and the Clinton dummy.
You want to consider a variety of models. Model I
contains the variables in (i) and (ii). Model II
contains the variables in (i), (ii), and (iii). Model
III contains the variables in (i), (ii), (iii) and
(iv).