ECON 103A San Jose State University Week 10 Interpret Dummy Variables Questions

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Thu Oct 28 5:40 PM
Week 10 Check-in: End of Ch6 X
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Week 10 Check-in: End of Ch6, Interpret
Dummy Variable
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1. Suppose we have a categorical variable for race with 4 categories. How many dummy variables will we
need to include in a standard OLS model (that includes a constant)? Why?
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2.What is the effect of X on y for men in the following equation?
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Yi= b0 + b1 Malei + b2 Xi + b3 Malei x Xi + ei
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Dummy Variables

OLS model

number of categories

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