categorical dummy variables
Posted: 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?
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?