Dr. Ng informs you that the board is also concerned with how 'race' impacts the distribution of wage. She wants to report to the board on the following claims: "Married black players earn higher wages than married non-black players."

It is said that i should add race(black=1, non-black=0) as new interactive term into a regression model i have done for prior parts that is : Wage = (intercept coefficient) + (productivity index coefficient) + (marriage coefficient)

But i don't know how, please help.

*i got the raw data of 100 NBA players productivity index, age, marriage( married=1, unmarried=0), race, wages, log wages

Some tips:

-If you use log of wages as dependent variable, pay attention at the interpretation of the

coefficients.

-Dummy variable trap: always have a base group out of the regression model. Model

coefficients are interpreted as the difference in (log) wages between the two groups

-Omitted variable problem: always control for as many factors as your data allow. In

this case, you should think of the role of experience, age and other players'

information

- Nonlinearities between (log) wages and some characteristics like the players' age.