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Your Textbook Discussed the Regression Model When X Is a Binary

Question 52

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Your textbook discussed the regression model when X is a binary variable Yi=β0+β1Di+ui,i=1,…,nY _ { i } = \beta _ { 0 } + \beta _ { 1 } D _ { i } + u _ { i } , i = 1 , \ldots , n
Let YY represent wages, and let DD be one for females, and 0 for males. Using the OLS formula for the intercept coefficient, prove that β^0\widehat { \beta } _ { 0 } is the average wage for males.

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