7. Imagine you regress earnings of individuals on a constant, a binary variable("Male") which takes on the value 1 for males and is 0 otherwise, and another binaryvariable ("Female ") which takes on the value 1 for females and is 0 otherwiseBecause females typically earn less than males, you would expecta) the coefficient for Male to have a positive sign, and for Female a negative signb) the coefficient for Male to have a negative sign, and for Female a positive sign.c) none of the OLS estimators to exist because there is perfect multicollinearity.d) both the coefficient for Male and that for Female to have positive signs

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Asked Nov 24, 2019
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7. Imagine you regress earnings of individuals on a constant, a binary variable
("Male") which takes on the value 1 for males and is 0 otherwise, and another binary
variable ("Female ") which takes on the value 1 for females and is 0 otherwise
Because females typically earn less than males, you would expect
a) the coefficient for Male to have a positive sign, and for Female a negative sign
b) the coefficient for Male to have a negative sign, and for Female a positive sign.
c) none of the OLS estimators to exist because there is perfect multicollinearity.
d) both the coefficient for Male and that for Female to have positive signs
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7. Imagine you regress earnings of individuals on a constant, a binary variable ("Male") which takes on the value 1 for males and is 0 otherwise, and another binary variable ("Female ") which takes on the value 1 for females and is 0 otherwise Because females typically earn less than males, you would expect a) the coefficient for Male to have a positive sign, and for Female a negative sign b) the coefficient for Male to have a negative sign, and for Female a positive sign. c) none of the OLS estimators to exist because there is perfect multicollinearity. d) both the coefficient for Male and that for Female to have positive signs

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Here multicollinearity will exists between the two independent variable i.e, Male and Female. As per the assumption of multiple linear regression, there should be no relation betw...

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