Consider the regression model Salary= B1+B2WorkExperience+u
Suppose we have another variable Region which captures where the individuals in our data set live, and
Region = 1 if they live in the north
Region = 2 if they live in the south
Region = 3 if they live in the east
Region = 4 if they live in the west
We believe that Region affects the intercept of the linear relationship between Salary and WorkExperience.
If we wish to account for this in our model, how many additional regressors need to be included in our regression model.
A 3
B 4
C 6
D 7