The objective outlined in the introductory case is to determ ine if there is any gender or age discrim ination at a large liberal arts college. Use the data in Table 17.1 to answ er the follow ing questions.

a. Estim ate y = β 0 + β1x + β 2d 1 + β3d2 + ε , w here y is the annual salary (in

$1,000s) of a professor, x is the num ber of years o f experience, d1 is a dummy variable that equals 1 if the professor is m ale and 0 otherw ise, and d2 is a dum m y variable that equals 1 if the professor is 60 years of age or older and 0 otherw ise.

b. Com pute the predicted salary of a 50-year-old m ale professor with 10 years o f experience. Com pute the predicted salary of a 50-year-old fem ale professor w ith 10 years o f experience. D iscuss the im pact of gender on predicted salary.

c. Com pute the predicted salary o f a 65-year-old fem ale professor w ith 10 years of experience. D iscuss the im pact o f age on predicted salary.