Question

In: Economics

In the following regression, “drive” is a dummy indicating a person owns a personal vehicle, “employed”...

  1. In the following regression, “drive” is a dummy indicating a person owns a personal vehicle, “employed” is a dummy indicating a person is employed, “age” is a person’s age, and “married” is a dummy indicating a person is married:

drive=0.3+0.2 employed+0.003 age+0.4 married

The command in STATA is: reg drive employed age married

  1. Interpret the coefficient 0.2 on employed.  

  1. Predict the probability of owning a vehicle for a person who is employed, 60 years of age and married.  

Drive=.3+.2(1)+.003(60)+.4(1)=1.08

  1. The answer you got from the previous question is actually greater than 1. Explain why that is.  

Will you be able to test the significance of the coefficients if you were given all the standard errors and/or p-values? Say “yes” or ‘no”, then explain.

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
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