1. Dave Dumbledore is studying the test scores of students in an econometrics class. Only juniors and seniors are enrolled in this class. Dave wants to determine if, other things being equal, seniors have statistically significantly higher test scores than juniors do. Dave uses the following regression specification: T=bo + bị SENIOR, + b2 JUNIOR, + other variables + U, where T- student i's test score; SENIOR, = 1 if student i is a senior and 0 if not; JUNIOR, -1 if student i is a junior and 0 if not; U,- error term; and the other variables include grades in math courses and SAT scores. Dave looks at his computer output and exclaims, "This is crazy! The computer refuses to include the variable JUNIOR, and actually prints out a message saying that I have to drop it!" Is something wrong with Dave's computer... or is something wrong with Dave? Explain your answer. %3D %3!

College Algebra
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ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
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1. Dave Dumbledore is studying the test scores of students in an econometrics class. Only juniors and
seniors are enrolled in this class. Dave wants to determine if, other things being equal, seniors have statistically
significantly higher test scores than juniors do. Dave uses the following regression specification:
Ti= bo + bị SENIOR, + bz JUNIOR, + other variables + U, where T, = student i's test score; SENIOR, = 1 if student
i is a senior and = 0 if not; JUNIOR 1 if student i is a junior and = 0 if not; U = error term; and the other
variables include grades in math courses and SAT scores. Dave looks at his computer output and exclaims, "This is
crazy! The computer refuses to include the variable JUNIOR, and actually prints out a message saying that I have
to drop it!" Is something wrong with Dave's computer... or is something wrong with Dave? Explain your answer.
Transcribed Image Text:1. Dave Dumbledore is studying the test scores of students in an econometrics class. Only juniors and seniors are enrolled in this class. Dave wants to determine if, other things being equal, seniors have statistically significantly higher test scores than juniors do. Dave uses the following regression specification: Ti= bo + bị SENIOR, + bz JUNIOR, + other variables + U, where T, = student i's test score; SENIOR, = 1 if student i is a senior and = 0 if not; JUNIOR 1 if student i is a junior and = 0 if not; U = error term; and the other variables include grades in math courses and SAT scores. Dave looks at his computer output and exclaims, "This is crazy! The computer refuses to include the variable JUNIOR, and actually prints out a message saying that I have to drop it!" Is something wrong with Dave's computer... or is something wrong with Dave? Explain your answer.
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