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Impact of race on football card values. University of Colorado sociologists investigated the impact of race on the value of professional football players鈥 鈥渞ookie鈥 cards (Electronic Journal of Sociology, 2007). The sample consisted of 148 rookie cards of National Football League (NFL) players who were inducted into the Football Hall of Fame. The price of the card (in dollars) was modeled as a function of several qualitative independent variables: race of player (black or white), card availability (high or low), and player position (quarterback, running back, wide receiver, tight end, defensive lineman, linebacker, defensive back, or offensive lineman).

  1. Create the appropriate dummy variables for each of the qualitative independent variables.
  2. Write a model for price (y) as a function of race. Interpret the鈥檚 in the model.
  3. Write a model for price (y) as a function of card availability. Interpret the鈥檚 in the model.
  4. Write a model for price (y) as a function of position. Interpret the鈥檚 in the model.

Short Answer

Expert verified
  1. To represent the 3 qualitative independent, 9 dummy variables will be created.
  2. A model for price of the card (y) as a function of the race of the player can be written as y=0+1x1where x1represents the player鈥檚 race.
  3. A model for the price of the card(y) as a function of card availability can be written as y=0+1x2where x2represents card availability.
  4. A model for wine quality (y) as a function of the grape-picking method can be written asy=0+1x2+2x3+3x5+4x6+5x7+6x8+7x9 where x4,x5,x6,x7,x8andx9 represent the player position.

Step by step solution

01

Creating dummy variables

The qualitative independent variables here are the grape-picking method, soil type, and slope orientation.

Letx1be the race of the player, wherex1= 1if the player is white andx1= 0if he is black

x2= card availability where value ofx2= 1if card availability is high;x2= 0if card availability is low

Since player position has 8 categories, (k-1) = 7dummy variables will be introduced

role="math" localid="1649842591035" x3= player position;x3= 1if player position is quarterback;x3= 0otherwise

x4= player position;x4= 1if player position is running back,x4= 0otherwise

x5= player position;x5= 1if player position is wide receiver,x5= 0otherwise

x6= player position; role="math" localid="1649842839417" x6= 1if player position is tight end,x6= 0otherwise

x7= player position;x7= 1if player position is defensive lineman,x7= 0otherwise

x8= player position;x8= 1if player position is linebacker,x8= 0otherwise

x9= player position;x9= 1if player position is defensive back,x9= 0otherwise

Therefore, to represent the 3 qualitative independents, 9 dummy variables will be created.

02

Dummy variable model

A model for the price of the card (y) as a function of the race of the player can be written asy=0+1x1 wherex1 represents the player鈥檚 race

0represents the price of the card(y) at a base level (here base level means the level when x1= 0, meaning the race of the player is black)

1represents the changes in the price of the card (y) when the race of the player is white.

03

Dolt variable imitation

A model for the price of the card(y) as a function of card availability can be written asy=0+1x2 wherex2 represents card availability.

0represents the price of the card (y) at a base level (here base level means the level when x2= 0, meaning the card availability is low)

1represents the changes in the price of the card (y) when the card availability is high.

04

Dunce variable representation

A model for wine quality (y) as a function of the grape-picking method can be written asy=0+1x3+2x4+3x5+4x6+5x7+6x8+7x9wherex4,x5,x6,x7,x8andx9represent the player position.

0represents the price of the card at a base level (the base level taken here is when the player鈥檚 position is offensive lineman)

1represents the changes in the price of the card (y) whena player鈥檚 position is quarterback.

2represents the changes in the price of the card (y) when a player鈥檚 position is running back.

localid="1649843613800" 3represents the changes in the price of the card (y) when a player鈥檚 position is a wide receiver.

4represents the changes in the price of the card (y) when a player鈥檚 position is a tight end.

localid="1649843745574" 5represents the changes in the price of the card (y) when a player position is a defensive lineman.

localid="1649843755924" 6represents the changes in the price of the card (y) when a player position is a linebacker.

localid="1649843731417" 7represents the changes in the price of the card (y) when a player鈥檚 position is a defensive back.

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