The discussion following Equation (8.28) interprets the coef
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The discussion following Equation (8.28) interprets the coefficient on interacted binary variables using the conditional
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The discussion following Equation (8.28) interprets the coefficient on interacted binary variables using the conditional mean zero assumption. This exercise shows that interpretation also applies under conditional mean independence. Consider the hypothetical experiment in Exercise 7.11. a. Suppose that you estimate the regression Yi = g0 + g1X1i + ui using only the data on returning students. Show that g1 is the class size effect for returning students
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