How would you interpret the dummy coef?cients

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Reference no: EM13881787

In his study on the labor hours spent by the FDIC (Federal Deposit Insur- ance Corporation) on 91 bank examinations, R. J. Miller estimated the following function*:
l^n Y = 2.41 + 0.3674 ln X1 + 0.2217 ln X2 + 0.0803 ln X3

 

(0.0477)

(0.0628)

-0.1755D1

(0.0287)

+  0.2799D2  +  0.5634D3  - 0.2572D4

 

(0.2905)

(0.1044)        (0.1657)         (0.0787)

where Y = FDIC examiner labor hours
X1 = total assets of bank
X2 = total number of of?ces in bank
X3 = ratio of classi?ed loans to total loans for bank
D1 = 1 if management rating was "good"
D2 = 1 if management rating was "fair"
D3 = 1 if management rating was "satisfactory"

R2 = 0.766

D4 = 1 if examination was conducted jointly with the state
The ?gures in parentheses are the estimated standard errors.
a. Interpret these results.
b. Is there any problem in interpreting the dummy variables in this model since Y is in the log form?
c. How would you interpret the dummy coef?cients?

Reference no: EM13881787

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