Assignment:
An analyst wishes to study how expenditure on travel by an individual varies with their gender and employment status. They collect cross-sectional data for these variables and the data is as follows:
|
Travel expenditure in dollars
|
Gender
|
Employment Status
|
|
40
|
Male
|
Employed
|
|
31
|
Female
|
Unemployed
|
|
18
|
Male
|
Unemployed
|
|
19
|
Male
|
Unemployed
|
|
47
|
Male
|
Employed
|
|
27
|
Female
|
Unemployed
|
|
26
|
Female
|
Unemployed
|
|
17
|
Male
|
Unemployed
|
|
43
|
Male
|
Employed
|
|
49
|
Male
|
Employed
|
|
15
|
Male
|
Unemployed
|
|
25
|
Female
|
Unemployed
|
|
29
|
Female
|
Unemployed
|
|
20
|
Male
|
Unemployed
|
|
41
|
male
|
Employed
|
Required:
(i) Taking gender as D1i = 1 if individual is female, but 0 otherwise; and employment status as D2i = 1 if employed, but 0 otherwise; regress travel expenditure on gender and employment status
(ii) Interpret the results of the estimated regression model
(iii) What expenditure value will a male unemployed person make?
(iv) Calculate R2 and adjusted R2
(v) Test for the overall significance of the model
(vi) Derive the variance-covariance matrix, and test for the statistical significance for each parameter in the model.