Question

Consider the Categorical Variable Education with the following categories: High School Only, Bachelor’s, Graduate Degree. The dependent variable in the Linear Regression is the amount contributed to political campaigns in the last election. Suppose Bachelor’s is the excluded category. The coefficient on High School Only is −$101.23. The coefficient on Graduate Degree is $20.45. What is the interpretation of the coefficient on High School Only?

Group of answer choices

People who stop at a Bachelor’s Degree contribute $101.23 less to political campaigns compared to a person with only a High School level of education

People who only have a High School level of education contribute $101.23 less to political campaigns compared to a person with a Graduate Degree

People who only have a High School level of education contribute $101.23 less to political campaigns compared to a person who stops at a Bachelor’s Degree

There is no way to determine from these results what the campaign contributions of people with only a High School level of education compares to people who stop at a Bachelor’s Degree

Answer 1

this type of regression must be there

where two dummy variables are used for three categorical variables

here

and for high school

= 0 otherwise

   for graduate degree

= 0 otherwise

so for highschool equation will be

..................(1)

for bachelors equation will be

.............................................(2)

for graduate , eq will be

comparing eq 1 and 2 ,corect option is

People who only have a High School level of education contribute $101.23 less to political campaigns compared to a person who stops at a Bachelor’s Degree