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Econometrics

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Interpretation for Estimated Coefficient on Male Dummy Variable

EMETRC-JLWB6G

Suppose you estimate the following model, where the natural logarithm of hourly wages is a function of a male dummy variable and years of education:

$$ln(wage) = \beta_{0} + \beta_{1}male + \beta_{2}edu + u$$

...to get:

$$\hat{ln(wage)} = 0.9 + 0.18male + 0.08{2}edu$$

What is the correct interpretation for the estimated coefficient on the male dummy variable?

A

On average, holding education constant, men earn $\$18$ more per hour than women.

B

On average, holding education constant, men earn $18\%$ more per hour than women.

C

On average, holding education constant, women earn $18\%$ more per hour than men.

D

On average, holding education constant, women earn $\$1.8$ less per hour than men.

E

On average, holding education constant, women earn $1.8\%$ less per hour than men.