Which of the Following Is NOT True of the Oaxaca

question 4

Multiple Choice

Which of the following is NOT true of the Oaxaca transformation?

• A) The Oaxaca transformation compares the actual earnings of the average majority member with the hypothetical earnings of the average minority member were he endowed with the same average productivity as the majority member.
• B) The Oaxaca transformation allows for an appropriate apples-to-apples comparison.
• C) The residual of the Oaxaca transformation captures the extent of wage discrimination.
• D) The observed wage gap of the Oaxaca transformation is equivalent to the productivity differences between the majority and minority groups.
• E) The Oaxaca transformation calculates predicted earnings for an average minority member.

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Definitions:

Data Points

Individual values or measurements that are collected as part of a data set.

Curvilinear

Describes a relationship between two variables that is graphed as a curved line.

Compounded Interest

This refers to the calculation of interest on the original principal amount as well as on the interest that has accrued in earlier times, applicable to both deposits and loans.

Rate Of Return

The earning or losing of funds on an investment throughout a defined timeframe, detailed as a percentage of the original amount invested.