Statistics simple regression question
Statistics simple regression question
The following simple regression model is augmented with a dummy variable, Di,
yi=a+bxi+cDi+d(Di * xi)+ei i=1,...n
Assume that all estimated coefficients are different from zero. Draw a graph depicting the regression line when Di=0 and when Di=1. Assume that:
a hat > 0, b hat <0, c hat <0, and d hat > 0
Label all portions of the graph.
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