Consider the Following Multiple Regression Models (A)to (D)below $\widehat { E a m }$

question 58

Multiple Choice

Consider the following multiple regression models (a) to (d) below. DFemme = 1 if the individual is a female, and is zero otherwise; DMale is a binary variable which takes on the value one if the individual is male, and is zero otherwise; DMarried is a binary variable which is unity for married individuals and is zero otherwise, and DSingle is (1-DMarried) . Regressing weekly earnings (Earn) on a set of explanatory variables, you will experience perfect multicollinearity in the following cases unless:

• A) \(\widehat { E a m }\) _i = \(\widehat { \beta 0 }\) + \(\widehat { \beta 1 }\) DFemme + \(\widehat{\beta} _ { 2 }\) Dmale + \(\widehat { \beta } _ { 3 }\) X_3i
• B) \(\widehat{ E a m }\) _i = \(\widehat { \beta 0 }\) + \(\widehat { \beta 1 }\) DMarried + \(\widehat{\beta} _ { 2 }\) DSingle + \(\widehat { \beta } _ { 3 }\) X_3i
• C) \(\widehat { E a m }\)
• _i = \(\widehat { \beta 0 }\) + \(\widehat { \beta 1 }\) DFemme + \(\widehat { \beta } _ { 3 }\) X_3i
• D) \(\widehat { E a m }\) _i = \(\widehat { \beta 1 }\) DFemme + \(\beta _ { 2 }\) Dmale + \(\widehat { \beta _ { 3 }}\) DMarried + \(\widehat { \beta 4 }\) DSingle + \(\widehat { \beta 5 }\) X_3i

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