Suppose we regress individuals' health insurance coverage status on yearly earnings (unit: $1,000), we get Y = 0.10 + 0.009 X, where Y is a dummy equal to 1 if the person is covered by health insurance and 0 otherwise. X is yearly earning. Assume that the average health insurance coverage rate among the studied sample is 0.2. a. What is the percentage point increase in health insurance coverage rate if yearly earning increases by $2,000? b. What is the percentage increase (relative to sample mean) in health insurance coverage rate if yearly earning increases by $2,000?

Suppose we regress individuals' health insurance coverage status on yearly earnings (unit: $1,000), we get Y = 0.10 + 0.009 X, where Y is a dummy equal to 1 if the person is covered by health insurance and 0 otherwise. X is yearly earning. Assume that the average health insurance coverage rate among the studied sample is 0.2. a. What is the percentage point increase in health insurance coverage rate if yearly earning increases by $2,000? b. What is the percentage increase (relative to sample mean) in health insurance coverage rate if yearly earning increases by $2,000?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 8QTD

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