Question

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	−0.82	0.25	−3.28	0.0020
x	3.36	1.20	2.80	0.0074
d1	−15.41	16.75	−0.92	0.3624
d2	8.28	2.40	3.45	0.0012

a. Compute yˆy^ for x = 312, d₁ = 1, and d₂ = 0; compute yˆy^ for x = 312, d₁ = 0, and d₂ = 1. (Round your answers to 2 decimal places.)

	yˆ
x = 312, d1 = 1 and d2 = 0
x = 312, 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 15.41 units greater than when d₁ = 0, holding everything else constant.unanswered
• When d₂ = 1, ŷ is 8.28 units greater than when d₂ = 0, holding everything else constant.unanswered
• When d₁ = 1, ŷ is 15.41 units less than when d₁ = 0, holding everything else constant.unanswered
• When d₂ = 1, ŷ is 8.28 units less when d₂ = 0, holding everything else constant.unanswered

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

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

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

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

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

Answer 1