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Econometrics

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Moderate

Actual Wage in Simple Regression Model

EMETRC-MXKYAP

Suppose we estimate the following model of hourly wage as a function of years of education, given data on a sample of individuals:

$$wage = \beta_{0} + \beta_{1} edu + u$$

Suppose that for one individual in the sample $\hat{y} = 32$ and $\hat{u} = -3$.

What is this person's actual hourly wage?

A

$35$

B

$32$

C

$29$

D

$3$