Consider the Following Data for Men and Women If a Regression Estimates the Return to Experience for Men

question 24

Multiple Choice

Consider the following data for men and women: $$\begin{array} { l r r } & \text { Men } & \text { Women } \\\text { Average Hourly Wage: } & \$ 12.40 & \$ 9.90 \\\text { Average Years of Work Experience: } & 14.3 & 9.5\end{array}$$ If a regression estimates the return to experience for men, ?_M, to be 0.25, how much of the average difference in wages can be attributed to differences in work experience and how much can be attributed to discrimination and/or unobservable characteristics?

• A) $0.00 to differences in work experience; $2.50 to discrimination/unobservable characteristics
• B) $1.20 to differences in work experience; $1.30 to discrimination/unobservable characteristics
• C) $1.30 to differences in work experience; $1.20 to discrimination/unobservable characteristics
• D) $1.50 to differences in work experience; $1.00 to discrimination/unobservable characteristics
• E) $2.50 to differences in work experience; $0.00 to discrimination/unobservable characteristics

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Definitions:

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A statistical measure indicating that two variables move in opposite directions with a correlation coefficient of -1.

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Standard Deviation

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Optimal Risky Portfolio

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