F IL E According to th e World Health Organization, obesity has reached ep idem ic p ro p o rtio n s globally. While obesity has generally b een linked w ith chronic disease an d disability, researchers arg u e th a t it m ay also affect w ages. In o th e r w ords, th e body m ass index (BMI) of an em p lo y ee is a p red icto r for salary. (A person is considered o v erw eig h t if h is/h er BMI is a t least 25 an d o b e se if BMI ex ceed s 30.) C onsider salary d a ta (in $1,000s) of 30 c o lle g e-e d u ca te d m en w ith th eir respective BMI and a race du m m y th a t rep resen ts 1 for w h ite an d 0 otherw ise.

A portio n of th e d a ta is show n in th e accom panying table;

th e co m p lete d ata set can be found on th e tex t w ebsite, labeled BMI.

Salary BMI White 34 33 1 43 26 1

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45 21 1

a. Estim ate a m odel for Salary w ith BMI and W hite as th e explanatory variables. W hat is th e estim ated salary of a w hite college-educated worker w ith a BMI of 30? C om pute th e corresponding salary of a nonw hite worker.

b. R e-estim ate th e m odel with BMI, White, and a product of BMI and W hite as th e explanatory variables. W hat is th e estim ated salary of a w hite college-educated worker with a BMI of 30? C om pute th e corresponding salary of a nonw hite worker.