Question: An equation explaining chief executive officer salary is The data used are in CEOSALI.RAW, where finance, consprod, and utility are binary variables indicating the financial,

An equation explaining chief executive officer salary is

The data used are in CEOSALI.RAW, where finance, consprod, and utility are binary variables indicating the financial, consumer products, and utilities industries. The omitted industry is transportation.
(i) Compute the approximate percentage difference in estimated salary between the utility and transportation industries, holding sales and roe fixed, is the difference statistically at the 1% level?
(ii) Use equation (7.10) to obtain the exact percentage difference in estimated salary between the utility and transportation industries and compare this with the answer obtained in part (i).
(iii) What is the approximate percentage difference in estimated salary between the consumer products and finance industries? Write an equation that would allow you to test whether the difference is statistically significant.

log(salary) 4.59 257 log(sales) +.011 roe +158 finance (.30) 032) +.181 consprod 283 utility (.085) (.004) .089) (.099)

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1 ii iii The approximate difference is just the coefficient on util... View full answer

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