7. To test whether there is a significant difference in the mean weekly earningsbetween makes and females (i.e., whether gender affects mean earnings), you regressweekly earnings on a constant and a binary variable, which takes on a value of 1 forfemales and is 0 otherwise. The results were (standard errors are in theparentheses):2Ear 610.5+160.2Female, n=5000, R2 = 0.086(9.4) (12.6)(a) Will you do a t or an F test? What is your conclusion?(b) Are these results evidence enough to argue that there is discrimination againstfemales? Why or why not?

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Asked Nov 30, 2019
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7. To test whether there is a significant difference in the mean weekly earnings
between makes and females (i.e., whether gender affects mean earnings), you regress
weekly earnings on a constant and a binary variable, which takes on a value of 1 for
females and is 0 otherwise. The results were (standard errors are in the
parentheses):
2
Ear 610.5+160.2Female, n=5000, R2 = 0.086
(9.4) (12.6)
(a) Will you do a t or an F test? What is your conclusion?
(b) Are these results evidence enough to argue that there is discrimination against
females? Why or why not?
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7. To test whether there is a significant difference in the mean weekly earnings between makes and females (i.e., whether gender affects mean earnings), you regress weekly earnings on a constant and a binary variable, which takes on a value of 1 for females and is 0 otherwise. The results were (standard errors are in the parentheses): 2 Ear 610.5+160.2Female, n=5000, R2 = 0.086 (9.4) (12.6) (a) Will you do a t or an F test? What is your conclusion? (b) Are these results evidence enough to argue that there is discrimination against females? Why or why not?

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Expert Answer

Step 1

Given Least square equation
n = 5000
R2 = 0.086
Ear=610.5+160.2 Female

Bo 1.39, Standard error (S.E) of Bo =9.4
BFemale
160.2, S. E (BFemale) = 12.6
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Bo 1.39, Standard error (S.E) of Bo =9.4 BFemale 160.2, S. E (BFemale) = 12.6

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Step 2
  1. a) We will use the t-test to test the difference in mean weekly earnings between males and females

 H0: βFemale = 0

H1...

BFemale BFemale
t =
160.2 - 0
12.714
S.E(BFemale)
12.6
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BFemale BFemale t = 160.2 - 0 12.714 S.E(BFemale) 12.6

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