Suppose We Are Interested in the Effect of Gender on Income

question 2

Multiple Choice

Suppose we are interested in the effect of gender on income and estimate a model that includes a dummy variable for men. If we instead estimate a model that includes a dummy variable for women,

• A) The coefficient on the dummy variables will be exactly the same.
• B) The coefficient on the dummy variables will differ across models, but the estimated difference of means between men and women will not change.
• C) The fit of the model will change.
• D) We will get different answers when testing a null hypothesis that there is no gender effect.

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