Your Textbook Discussed the Regression Model When X Is a Binary

question 15

Essay

Your textbook discussed the regression model when X is a binary variable
Y_i = ?₀ + ?_iD_i + u_i, i = 1,..., 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:

Sales Clerk

An employee who handles the exchange of goods for payment, typically in a retail setting, assisting customers in finding products and completing purchases.

Daily Sales

The total revenue generated from goods or services sold by a company during a single day.

Static Budget

A fixed budget that does not change with actual activity levels, designed for planning purposes.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, providing a more useful tool for performance evaluation.