Rather than use a dummy variable d coded as 1 for men and 0, Ask an Expert

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Rather than use a dummy variable (D, coded as 1 for men and 0 for women) as the explanatory variable in a regression of responses of men and women, a model included an explanatory variable X coded as + 1 for men and - 1 for women. (This type of indica- tor variable is sometimes used rather than a dummy variable.)

(a) What is the difference between the scatterplot of Y on X and the scatterplot of Y on D?

(b) Does the regression of Y on D have the same R2 as the regression of Y on X?

(d) Compare b0 and b1 in the regression of Y on D to b0 and b1 in the regression of Y on X.

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Accounting Basics, Accounting

Category:- Accounting Basics
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