* R. Carter Hill, William E. Griffiths and Guay C. Lim, * Principles of Econometrics, Third Edition, Wiley, 2008. * Chapter 7.2.3 Dummy Variables * The University Effect on House Prices SAMPLE 1 1000 READ (utown.shd) PRICE SQFT AGE UTOWN POOL FPLACE STAT PRICE SQFT AGE UTOWN POOL FPLACE * Generate an interaction variable GENR USQFT=SQFT*UTOWN * Estimate a price equation - Table 7.3, p. 175 OLS PRICE UTOWN SQFT USQFT AGE POOL FPLACE * Estimate the $ price per square foot for houses near the university. * See the results in the middle of p. 175. * Be careful about units of measurement: * PRICE is measured in thousands of dollars and * SQFT is measured in hundreds of square feet * On the TEST command the variable names represent the coefficients TEST 10*(SQFT+USQFT) * Estimate the price per square foot for houses in other areas TEST 10*SQFT STOP