A large company is accused of gender discrimination in wages.The following model has been estimated from the company's human resource information ln(WAGE)= 1.439 + .0834 EDU + .0512 EXPER + .1932 MALE
Where WAGE is hourly wage,EDU is years of education,EXPER is years of relevant experience,and MALE indicates the employee is male.How much more do men at the firm earn,on average?
A)$1.21 per hour more than females
B)19.32% more than females
C)$19.32 per hour
D)$19,320 more per year than females

Question

Quizplus · Accepted Answer

The coefficient for MALE (.1932) in the regression equation represents the percentage increase in wages for males compared to females, when holding education and experience constant. Since the model is in logarithmic form, the coefficient can be interpreted as a percentage change. Therefore, men earn 19.32% more than females, on average.

A Large Company Is Accused of Gender Discrimination in Wages