Question

Regression:

Litter = -0.205 + 0.431(Graffiti) + 0.017(Income) + -0.119(High Density) + u

1) Provide evidence using conditional means that neighborhoods with graffiti have fundamentally different characteristics than neighborhoods without graffiti. What does this say about other possible unobserved variables that could impact littering behavior.

Let me know if you need more information. I somewhat understand what the question is asking, but I don't know how to answer it. amd could use some help. Thank you.

Answer 1

The given regression equation is

Litter = -0.205 + 0.431(Graffiti) + 0.017(Income) + -0.119(High Density) + u

The absolute value the coefficient corresponding to "Graffiti" is greater than the others.

Also the coefficient of Income is very small and others are negative ( except Graffiti)

Graffiti takes only two values as 1 for neighborhoods with graffiti and 0 for neighborhoods without graffiti.

So if there is a neighborhoods with graffiti then the conditional mean of litter increases by 0.431 provided that the other variable are fixed.