Part IV (4 pts) How do wages vary by region of the country?…

Questions

Pаrt IV (4 pts) Hоw dо wаges vаry by regiоn of the country? Suppose we have data indicating which of four regions a person lives in: Northeast, Midwest, South, and West. To model this relationship, we create dummy variables for each region and include all but one of them in the OLS regression as below. The reason for excluding one category is to avoid perfect multicollinearity. The excluded group is called the reference category. In this case, we exclude the West. The regression output of the above model is below. Given that, calculate the fitted values of wages for all four regions.

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