Answer:
A) allows the population effect on log earnings of being married to depend on gender
Step-by-step explanation:
The regression equation of a dependent variable based on two or more independent variables is of the form:
Here,
<em>Y</em> = dependent variable
and
= independent variables
= interaction term
= regression coefficients.
If there is a significant interaction effect present then this implies that the effect of one independent variable ( or
) on the dependent variable (<em>Y</em>) differs every time with different value of the other independent variable (
or
) .
The provided regression equation is:
= dependent variable
and
= independent variables
In this case the interaction term is defined as follows:
The effect of being married on log earnings is dependent on different values of the variables , i.e. the gender of the
person.
Thus, the correct option is (A).