Refer to the model above.The inclusion of another binary variable in this model that takes a value of 1 if a person is uneducated,will give rise to the problem of _____.
A)omitted variable bias
B)self-selection
C)dummy variable trap
D)heteroskedastcity

Question

Quizplus · Accepted Answer

Including a binary variable for being uneducated alongside an intercept term and another binary variable for being educated can lead to perfect multicollinearity, known as the dummy variable trap.

Refer to the Model Above