Question: In the cancer data we have 43 observations for each type of cancer, giving a total of 172 observations for all the cancer types. Suppose you now estimate the following regression model:

C_i = B₁ + B₂Cig_i + B₃Lung_i + B₄Kidney_i + B₅Leukemia_i + u_i

where C = number of deaths from cancer, Cig number of cigarettes smoked, a dummy taking a value of 1 if the cancer type is lung, 0 otherwise, Kidney = a dummy taking a value of 1 if the cancer type is kidney, 0 other wise, and Leukemia 1 if the cancer type is leukemia, 0 otherwise. Treat deaths from bladder cancer as a reference group.

(a) Estimate this model, obtaining the usual regression output.

(b) How do you interpret the various dummy coefficients?

(c) What is the interpretation of the intercept in this model?

(d) What is the advantage of the dummy variable regression model over estimating deaths from each type of cancer in relation to the number of cigarettes smoked separately?