Suppose you've regressed profits across stores (i) in Indiana and Michigan over two years (t) on an Indiana dummy variable as well as on an interaction between an Indiana dummy variable and Year 2 dummy variable. Thus, your regression equation is: Profitsit = ?0 + ?1Indianait + ?2Year2it Indianait + Ui. What is the marginal effect of a store being in Indiana based off this regression equation?
A. ?1 + ?2 × Year2it
B. ?0 + ?1
C. ?2
D. ?0 + ?1 + ?2
Answer: A
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