What is the difference in the number of dummies proposed by researchers

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ANSWER ALL QUESTIONS

Question 1

The Eastern Cape province wants to embark on a salary harmonisation exercise for all its local municipalities. The province has 15 municipalities. Under each Municipality, there are 6 staff grades. The exercise's first step is to estimate each municipality's salary function. Given that no interaction terms exist, how many dummy variables will be used in the correctly specified regression?

A. 19

B. 20

C. 21

D. 88

E. 89

Question 2

To better understand the demographics, the two lead researchers propose to use two different approaches, researcher 1 proposes that 5 class dimensions with two categories be used to capture gender, age, marital status, residence and risk profile. Researcher 2 proposes a single demographics classification dimension with 32 categories.

What is the difference in the number of dummies proposed by researchers 1 and 2?

A. 36

B. 37

C. 0

D. 27

E. 26

Question 3

3.1 You survey farms in three South African provinces. The data you collected is presented in the Excel file tutorial 8. Using Excel, run a regression showing the impact of the prime rate on the farm prices and the differential coefficients for all three provinces. Your output should show the labels and a 95% confidence interval.

If your surname starts with a letter between A and I, use EC as your base category, If your surname starts with a letter between J and R, use WC as your base category, If your surname starts with a letter between S and Z, use KZN as your base category, Required: Copy the summary output of your result and paste it on your answer sheet.

(4 marks)

3.2 You are tasked to analyse the relationship between an individual's well-being, education level and gender. You opt to use the body mass index (BMI) to proxy well-being and for education, you opt to use a dummy variable. The education variable has three categories, primary, secondary and tertiary. Category pri means the highest level of education is at primary level, sec means the highest level of education is at high school level, and finally ter means the highest level of education is at tertiary level. The gender variable, with two categories; male (mal) and female (fem). You obtain the results below.

BMI = 26.07 +0.09fem - 0.82 sec-1.40ter - 0.6fem sec -0.95fem * ter

Se

(0.20) Answer the following;

(0.28)

(0.25)

(0.26)

(a) what is the mean BMI for tertiary-educated females

(b) comment on the BMI gender gap

 

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