categorical dummy variables

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smaria
Posts: 3
Joined: Thu Dec 20, 2012 7:54 am

categorical dummy variables

Postby smaria » Thu Dec 20, 2012 8:06 am

W=a_0+ a_1 IQ+ u_t

now use education dummy [EDUi] as intercept to study the impact of education level on wage earning patterns [include IQ as well]. Note that the dummies represent the following categories:
EDU1= { 1 primary, 0 otherwise}
EDU2= { 1 secondary, 0 otherwise}
EDU3= { 1 BSC, 0 otherwise}
EDU4= { 1 MSC, 0 otherwise}
Use primary as bench mark in your analysis.

how should i enter these dummies and run the equation?

EViews Gareth
Fe ddaethom, fe welon, fe amcangyfrifon
Posts: 13604
Joined: Tue Sep 16, 2008 5:38 pm

Re: categorical dummy variables

Postby EViews Gareth » Thu Dec 20, 2012 8:35 am


smaria
Posts: 3
Joined: Thu Dec 20, 2012 7:54 am

Re: categorical dummy variables

Postby smaria » Thu Dec 20, 2012 8:53 am

can you please explain with reference to my question? it would be a great help.


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