Question
(3) A subsample from the Current Population Survey is taken, on weekly earnings of individuals, their age, and their gender. You have read in the
(3)
A subsample from the Current Population Survey is taken, on weekly earnings of individuals, their age, and their gender. You have read in the news that women make 70 cents to the $1 that men earn. To test this hypothesis, you first regress earnings on a constant and a binary variable, which takes on a value of 1 for females and is 0 otherwise.
The results were:
Earn = 570.70 - 170.72(Female), R2=0.084, SER = 282.12.
(9.44) (13.52)
(a) Interpret the y-intercept estimate in this model. Is there a quantitative meaning?
(b) Interpret the slope estimate in this model. What is the quantitative meaning of the this
measure?
(c) Test whether or not the difference in the mean salaries for men and women is significantly different. Justify your choice of a one-sided or two-sided alternative test and explicitly state the null and the alternative hypothesis as well as the results of the test. Are these results evidence enough to argue that there is discrimination against females? Why or why not?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Calculus
Authors: Dale Varberg, Edwin J. Purcell, Steven E. Rigdon
9th edition
131429248, 978-0131429246
