Question
Imagine you have a model predicting ideology (where -1 is extremely liberal, 1 is extremely conservative and values can range anywhere between these two extremes)
Imagine you have a model predicting ideology (where -1 is extremely liberal, 1 is extremely conservative and values can range anywhere between these two extremes) with income (in thousands of dollars per year) and a dummy variable for White that equals 1 for White respondents and 0 for respondents of any other race. Assume that the following are the estimated coefficients for each variable:
Estimate | |
Intercept | -.3 |
Income (in thousands of $) | 0 |
White | .1 |
IncomeWhite | .01 |
[Note: These estimates are made up for teaching purposes, not based on any real data.]
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(a) Draw a plot with x-axis labeled Income (in thousands of $), which goes from 0 to 100 and y-axis labeled Ideology, which goes from -1 to 1. Graph the predicted relationship between income and ideology for non-Whites using a solid line.
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(b) Add a dashed line to your plot above showing the predicted relationship between income and ideology for Whites.
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(c) Briefly describe in words what the coefficient values tell you about the effects of income and how they vary by race. (Note: you can ignore statistical significance here and treat the estimates as if they were correct since the aim here is just to understand what the estimated values would imply.)
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