In Estimating the Effect of a Difference in Earnings for Ivy

question 37

Multiple Choice

In estimating the effect of a difference in earnings for ivy league graduates, non-ivy league college graduates, and non-college graduates the following regression is run: Earnings_i = β₀ + β₁IvyLeague_i + β₂NonIvyCollegeGraduate_i + U_i. What does the coefficient β₁ represent?

• A) The additional increase (decrease) in earnings from going from graduating college to graduating from an Ivy league school.
• B) The average earnings of an Ivy league graduate.
• C) The additional increase (decrease) in earnings from going from no college degree to an Ivy league degree.
• D) The average earnings of an ivy league graduate conditional on graduating from any college.

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