Your Textbook Discussed the Regression Model When X Is a Binary

question 52

Essay

Your textbook discussed the regression model when X is a binary variable $$Y _ { i } = \beta _ { 0 } + \beta _ { 1 } D _ { i } + u _ { i } , i = 1 , \ldots , n$$
Let $Y$ represent wages, and let $D$ be one for females, and 0 for males. Using the OLS formula for the intercept coefficient, prove that $\widehat { \beta } _ { 0 }$ is the average wage for males.

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Definitions:

Competitive Forces

Elements in the external environment that influence the competitiveness of a company, including rivalry among existing competitors, threat of new entrants, threat of substitute products, bargaining power of buyers, and bargaining power of suppliers.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the profitability of an enterprise beyond basic financial profit.

Monopoly

A market structure characterized by a single supplier controlling all the supply of a particular good or service.

Economic Loss

A situation where total costs exceed total revenues, leading to a negative profit.