Your Textbook Discussed the Regression Model When X Is a Binary

question 11

Essay

Your textbook discussed the regression model when X is a binary variable
Y_i = ?₀ + ?₁D_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 slope coefficient, prove that $\hat{\beta}_ { 1 }$ is the difference between the average wage for males and the average wage for females.

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A settlement house founded by Jane Addams and Ellen Gates Starr in 1889 in Chicago, aimed at improving the lives of the immigrant poor.

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