Consider the following model points-? + ? .exper + ?-quard + ? forward + ?4cente

Question

Consider the following model points-? + ? .exper + ?-quard + ? forward + ?4center + u. where points is the average number of points scored per game by an NBA player, exper is the player's years of playing in the NBA, guard- 1 if the player is a guard (0 otherwise), forward- 1 if the player is a forward (0 otherwise), and center 1 if the player is a center (0 otherwise). (There are three positions in basketball: guard, forward, and center. Because this model is linear in the parameters 0, ? 1, ?2, ?3, ?4 we can estimate these parameters with OLS. True False

Explanation / Answer

(1) True. We can use OLS estimation method in order to estimate the regression coefficients of both dummy and continuous variables.

(2) Center. This is because the "Center" dummy variable has been omitted from the model, which indicates that the group has been taken to be the base or benchmark group.

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