6. Consider the following model: Yi = Bo+ B,Dai + B2D21 +ui O if person i is a non-immigrant) where Di=1 if person i is an immigrant (0 if person i is immigrant 1 if person i is non-immigrant and Dzt...


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6. Consider the following model:<br>Yi = Bo+ B,Dai + B2D21 +ui<br>O if person i is a non-immigrant)<br>where Di=1 if person i is an immigrant<br>(0 if person i is immigrant<br>1 if person i is non-immigrant<br>and Dzt<br>and y, denotes the monthly salary.<br>(a) What is the problem with this model?<br>(b) How are you going to fix the problem? Suggest two ways to fix the problem.<br>

Extracted text: 6. Consider the following model: Yi = Bo+ B,Dai + B2D21 +ui O if person i is a non-immigrant) where Di=1 if person i is an immigrant (0 if person i is immigrant 1 if person i is non-immigrant and Dzt and y, denotes the monthly salary. (a) What is the problem with this model? (b) How are you going to fix the problem? Suggest two ways to fix the problem.

Jun 11, 2022
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