F IL E A researcher wonders whether males get paid more, on average, than females at a large firm . She interviews 50 employees and collects data on each worker's hourly wage (Wage), years of higher education (EDUC), experience

(EXPER), age (AGE), and gender of the employee (d equals 1 if male). A portion of the data is shown; the entire data set can be found on the text website, labeled Hourly Wage.

Wage EDUC EXPER AGE d

$37.85 11 2 40 1 21.72 4 1 39 0

⋮ ⋮ ⋮ ⋮ ⋮

24.18 8 11 64 0

a. Estimate: Wage = β 0 + β1 EDUC + β 2EXPER + β 3AGE +

β 4d + ε .

b. Predict the hourly wage of a 40-year-old male employee w ith 10 years of higher education and 5 years experience. Predict the hourly wage of a 40-year-old female employee w ith the same qualifications.

c. Interpret the gender coefficient. Is the gender variable significant at the 5% level? Does the data suggest that gender discrimination exists at this firm?