Question

Exercise 17-3 Algo

Using 50 observations, the following regression output is obtained from estimating y = β₀ + β₁x + β₂d₁ + β₃d₂ + ε.

	Coefficients	Standard Error	t Stat	p-value
Intercept	−0.42	0.25	−1.68	0.0997
x	3.52	1.10	3.20	0.0025
d1	−13.20	17.60	−0.75	0.4571
d2	7.55	2.50	3.02	0.0041

a. Compute yˆy^ for x = 200, d₁ = 1, and d₂ = 0; compute yˆy^ for x = 200, d₁ = 0, and d₂ = 1. (Round your answers to 2 decimal places.)

	yˆy^
x = 200, d1 = 1 and d2 = 0
x = 200, d1 = 0 and d2 = 1

b-1. Interpret d₁ and d₂. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

• When d₁ = 1, ŷ is 13.20 units greater than when d₁ = 0, holding everything else constant.unanswered
• When d₂ = 1, ŷ is 7.55 units greater than when d₂ = 0, holding everything else constant.unanswered
• When d₁ = 1, ŷ is 13.20 units less than when d₁ = 0, holding everything else constant.unanswered
• When d₂ = 1, ŷ is 7.55 units less when d₂ = 0, holding everything else constant.unanswered

b-2. Are both dummy variables individually significant at the 5% level?

• Yes, both dummy variables are individually significant at the 5% level.

• No, none of the dummy variables are individually significant at 5% level.

• No, only the dummy variable d₂ is significant at 5% level.

• No, only the dummy variable d₁ is significant at 5% level.

Answer 1