Econ103_Lec7 (2012_12_16 01_29_32 UTC)

Pool ifplace 28 indicator variables regression 2 of

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Unformatted text preview: 1 of 4 1.  Look at the variables in the dataset utown. use utown, clear! describe! 24 Indicator Variables (Descrip:on) 2 of 4 summarize! 25 Indicator Variables (Descrip:on) 3 of 4 list in 1/6! 26 Indicator Variables (Descrip:on) 4 of 4 1.  Create an indicator variable who’s value =1 if SQFT>2500 and 0 otherwise. Note: SQFT is in 100s. gen large = (sqft>25)! 2.  Create an indicator variable (MIDPRICE) based on the condi:ons PRICE > 215 and PRICE < 275. If both condi:ons hold, then MIDPRICE =1. gen midprice = (215 < price) & (price < 275)! list sqft price large midprice in 1/5! 27 Indicator Variables (Regression) 1 of 9 1.  Model: PRICE = β1 + δ1UTOWN+β2SQFT + γ(SQFT×UTOWN) +β3AGE +δ2UTOWN+δ3FPLACE+e 2.  Run the regression. There are two ways we can do this: reg price i.utown sqft i.utown#c.sqft age i.pool i.fplace! reg price i.utown##c.sqft age i.pool i.fplace! 28 Indicator Variables (Regression) 2 of 9 29 Indicator Variables (Regression) 3.  Test the significance of...
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