You Have Collected Data on Individuals and Their Attributes

question 6

Essay

You have collected data on individuals and their attributes.Consequently you have generated several binary variables,which take on a value of "1" if the individual has that characteristic and are "0" otherwise.One example is the binary variable DMarr which is "1" for married individuals and "0" for non-married variables.If you run the following regression:
ahei= β0 + β1×educi + β2×DMarri + ui
a.What is the interpretation for β2?
b.You are interested in directly observing the effect that being non-married ("single")has on earnings,controlling for years of education.Instead of recording all observations such that they are "1" for a not married individual and "0" for a married person,how can you generate such a variable (DSingle)through a simple command in your regression program?

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Definitions:

Semivariable Cost

Expenses that have both fixed and variable components, changing in total with activity level but not proportionally.

Total Cost

The sum of all costs associated with the production or acquisition of goods or services, including fixed and variable costs.

Cost Driver Rate

A rate that identifies the cost per unit of activity for a particular cost driver, aiding in the allocation of overhead costs based on actual usage or consumption.

Fixed Cost

Expenses that do not vary with the level of production or sales over a short period, such as rent, salaries, and insurance.