Write a model specification and define the variables for a multiple regression model to predict the medical costs as a function of employment type indicated as: professional, technical, sales, and managerial, and a function of gender indicated as

male and female. Be sure to include interactive terms.


The model specification for the given data can be represented as:
Y = medical costs
X1 = 1 if professional, 0 otherwise
X2 = 1 if technical, 0 otherwise
X3 = 1 if sales, 0 otherwise
X4 = 1 if managerial, 0 otherwise
X5 = 1 if female, 0 otherwise

Y = ?0 + ?1X1 + ?2X2 + ?3X3 + ?4X4 + ?5X5 + ?6(X1X5 ) + ?7(X2X5 ) + ?8(X3X5 ) + ?9(X4X5 )

Business

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