MGT 200 Lecture Notes - Lecture 4: Dependent And Independent Variables
Document Summary
There can be more than one regression line that fits the data, one for each sub-group in the sample. Intercept dummy variables- shift the intercept of the regression line if a characteristic is present. Change the intercept but do not change the slope. Slope dummy- 2 or more distinct observations in your data. Relationships are dependent and the explanatory variables are different. Slope dummy = dummy variable x explanatory variable that has a different effect on diff groups. Coefficient on the slope dummy measures the difference between the slopes of the 2 lines. Price = alpha +b1sqft + b2utown + b3utown_sqft. Alpha- price of an empty lot away from the university. Alpha + b2 price of an empty lot near the university. B1 price per square foot away from university. B1 + b3 price per square foot away from the university. For houses located away from campus, the price is constant + sqft coeffienct x sq ft.
