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Question Answered step-by-step Please use the following passage to respond to the short answer… Please use the following passage to respond to the short answer questions below.anna is interested in whether one’s ethnicity is associated with the level of income the earned during the year 2020. To test for this relationship, she runs a linear regression model using survey data with a nationally representative sample of U.S. adults. Her dependent variable; in (income), is the natural log of the income a respondent earned during 2020 in U.S. dollars. Her independent variable, Ethnicity, denotes the ethnicity of the respondent and consists of five categories numbered 1 through 5: 1=White, 2= Black, 3= Hispanic, 4=Asian, 5= other. After estimating her model, she finds that the ethnicity coefficient is positive and statistically significant at the 95% level. 1. Provide one justifiable reason why anna took the natural log of income2. What did anna do wrong by using the ethnicity variable in her model? (hint: why is it incorrect to intercept ethnicity (measured as described) as significantly associated with income from the above passage?3. Given your answer to #2, how would you correct anna’s mistakes and test for whether one’s ethnicity is associated with their level of earned income? For instance, how could you test for whether white americans earned more income on average then black americans or hispanic americans? Math Statistics and Probability PSCI 2075 Share QuestionEmailCopy link Comments (0)

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