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Introductory Econometrics 4th Edition by Jeffrey Wooldridge
Edition 4ISBN: 978-0324660609Introductory Econometrics 4th Edition by Jeffrey Wooldridge
Edition 4ISBN: 978-0324660609 Exercise 19
In Example 7.2, let noPC be a dummy variable equal to one if the student does not own a PC, and zero otherwise.
(i) If noPC is used in place of PC in equation, what happens to the intercept in the estimated equation What will be the coefficient on noPC (Hint: Write PC = 1 _ noPC and plug this into the equation
(ii) What will happen to the R-squared if noPC is used in place of PC
(iii) Should PC and noPC both be included as independent variables in the model Explain.
Equation
(i) If noPC is used in place of PC in equation, what happens to the intercept in the estimated equation What will be the coefficient on noPC (Hint: Write PC = 1 _ noPC and plug this into the equation
(ii) What will happen to the R-squared if noPC is used in place of PC
(iii) Should PC and noPC both be included as independent variables in the model Explain.
Equation
Explanation
Verified
Verified
i.
If one use noPC in place of PC , then...
Introductory Econometrics 4th Edition by Jeffrey Wooldridge
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