- Four students were asked to estimate a wage equation that takes into account
*gender*,*married status*and an interaction between*gender and married status*. They could define the following dummy variables:

Being *female*is represented by the dummy variable *F*=1 if the individual is a female and 0 otherwise orbeing *male*is represented by the dummy variable *M*=1 if the individual is a male and 0 otherwise*.* Being *married*is represented by the dummy variable *MAR*=1 if the individual is married and 0 otherwise whereas not being married is represented by the dummy variable *NMAR*=1 if the individual is not married and 0 otherwise. The wage equation is also to include continuous variables for years of education (*ED*) and years of work experience (*EX*).Each student estimated a different specification. These specifications are given in equations (1.1), (1.2), (1.3) and (1.4) below:

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(1.2)

(1.3)

(1.4)

** **

**1.a **(4 marks) Find the baseline person’s characteristics in each of the four models.

Using the property that one can always define one dummy variable with a combination of an alternative dummy answer the following:

**1.b **(2 marks) Define the in (1.1) in terms of the in (1.2).

**1.c **(2 marks) Define the in (1.2) in terms of the in (1.3).

**1.d** (2 marks) Define the in (1.3) in terms of the in (1.4).

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