5.3理解多类别虚拟解释变量的系数.pdf

we could add the dummy variable married to equation (7.9). the “marriage premium” is estimated to be about 5.3%, but it is not statistically different from zero (t 5 1.29). An important limitation of this model is that the marriage premium is assumed to be the same for men and women. © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Qualitative Information Using dummy variables for multiple categories 1) Define membership in each category by a dummy variable 2) Leave out one category (which becomes the base category) Holding other things fixed, married women earn 19.8% less than single men (= the base category) Testing whether the estimated difference between single and married women is statistically significant The easiest thing to do is to choose one of these groups to be the base group and to reestimate the equation. Multiple Regression Analysis: Qualitative Information Incorporating ordinal information using dummy variables Example: City credit ratings and municipal bond interest rates Municipal bond rate Credit rating from 0-4 (0=worst, 4=best) This specification would probably not be appropriate as the credit rating only contains ordinal information. A better way to incorporate this information is to define dummies: Dummies indicating whether the particular rating applies, e.g. CR =1 if CR=1 and CR =0 1 1 otherwise. All effects are measured in comparison to the worst rating (= base category). Example: Each person in the sample was ranked by an interviewer for physical attractiveness, using five categories (homely, quite plain, averag