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Continue with Question 6.6 but now consider the following model:
Yi = B0 + B1Xi + B2D2i + B3D3i + B4 (D2iXi) + B5 (D3iXi) + ui
a. What is the difference between this model and the one given in Question 6.6?
b. What is the interpretation of B4 and B5?
c. If B4 and B5 are individually statistically significant, would you choose this model over the previous one? If not, what kind of bias or error are you committing?
d. How would you test the hypothesis that B4 = B5 = 0? |
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