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Economics 102
Problem Set 3
Model Specification, Interactive Dummy Variables, and the Gender Gap
30 points possible
(Due in Canvas on Monday, July 26 before 10 p.m. PDT)
Department of Economics
UC Davis
Professor Siegler
Summer 2021
Instructions: Please submit one self‐contained Word or PDF document that includes all
your calculations, written explanations, R scripts, and R output. It is due on Monday,
July 26, before 10 p.m. in Canvas as attachments in Assignments. You may also attach
supplementary files, such as the actual R script files, etc. All of your work must be
typed and well‐formatted. No handwritten scans will be accepted. If your TA has
provided additional instructions, please follow those as well.
The data for this problem set are in gendergap.csv, and the data set consists of 1,259
observations from a random sample of individuals, and it includes the following
dependent and explanatory variables:
csv name
lnwage
looks
union
goodhealth
black
married
south
bigcity
smallcity
Description
The natural logarithm of
hourly wages
A measure of physical
attractiveness on a 1 to 5
scale (5=best)
1 if a member of a labor
union, and 0 otherwise.
1 if a person says they are in
good health, and 0 otherwise.
1 if a person is black, and
0 otherwise.
1 if the person is married,
and 0 otherwise.
1 if a person lives in the
South, and 0 otherwise.
1 if a person lives in a
large city, and 0
1otherwise.
if a person lives in a
small city, and 0
otherwise.
1
Stargazer table label
Natural Log of Wages
Physical Attractiveness
Member of Labor Union
Good Health
Black
Married
Lives in Southern U.S.
Lives in a Big City
Lives in a Small City
service
education
female
experience
female: experience
1.
1 if a person works in a
service sector occupation,
and 0 otherwise.
The number of years of
formal education.
1 if a person is female, and 0
otherwise.
The number of years of work
experience.
An interactive dummy
variable (see Part 2 below)
Works in Service Sector
Occupation
Years of Education
Female
Years of Work Experience
Female...