Justin--
I agree with Michael that your answer is worded in such a way as to
confuse someone into thinking that the marginal effect of another year
of education is 20% in 1991 in the model described. That said, any
interpretation of the type "with an additonal year of education, there
will be 12% increase in family income" (Joanne's wording) is clearly
wrong, as it ascribes a causal interpretation to a simple association.
A better interpretation is along the lines of "families have a mean
education of X and mean income of Y in this data; families with an
additional year of education have 12% higher family income on average"
with appropriate caveats about measurement of education and any
secular trends (e.g. how "family" education is measured, and what's
happening to that measure of education and income over the sample
period).
On 1/19/07, Michael Blasnik <[email protected]> wrote:
Maybe we should just agree to disagree.
----- Original Message -----
From: "White, Justin" <[email protected]>
> That is why I made reference to the year in my statement.
> -----Original Message-----
> Blasnik
>
> Here is your last sentence:
>
> Without knowing the constant, you could say that an increase in 1 year
> of education in 1991 results in a (0.12+0.08 = 0.20) 20% increase in family
> income.
>
> You have added together the coefficients for a year dummy and education
> and claimed that this is the marginal effect of a year of education. That
> is incorrect.
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