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Formally write the model that you need to estimate in order to test the null hypothesis
that employment among individuals living in the East and West North Central regions
(America’s heartland) are more negatively affected by increasing import exposure per
worker (increasing trade). Estimate this model. Test the null hypothesis. How do
your results differ if instead of using the change in employment-to-population ratio you
use the change in employment-to-population ratio within the manufacturing industry
d sh empl mfgi? [Hint: You will need to create a new dummy variable.]
This is a question in stata regression analysis using the regression ∆Yi = α + β1∆IPWChina−USi + β2RSHi +(sum from m=3 to 6 βmxmi) +(sum from k=1 to 8 δkregionki) + γtt2i + ei. My question is how to test whether a dummy variable being set to 1 leads to an increase in the coefficient on another OLS estimator. I have already determined that the generated dummy variable is the sum of dummy variables for encentral region and wncentral region, but I do not know how to test if when this is equal to 1 there is a lower coefficient on x3 (import exposure).
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