28 points Consider the following equation in which salaries

28 points) Consider the following equation in which salaries are predicted based on
education, race, and gender.
Log (salary) = 10.59 + 0.127 log (postsec) - 0.145 (female) - 0.069 (black)

(1.22) (0.053) (0.041) (0.025)
+ 0.021 (female*black)
+ (0.0052)
n = 3,333 R2 = 0.238
where salary is the dollar salary of a worker, postsec is the number of years of post high
school education of a worker, female equals 1 if the worker is female and 0 if male,
black equals 1 if the worker is black and 0 otherwise.

What is the approximate estimated percentage difference in salary between black
females and nonblack females? What would you need to do to test whether the
difference is statistically significant?

Solution