Plug into Stata:
clear all
use if age >= 25 & age <= 35
set seed 19989
gen select = rnormal(0,1)
sort select
gen income = incp_wag / 10000
drop if income == .
keep if _n <= 2000
Carefully explain the potential issues on Model 1 when you have the dependent variable as a binary variable. Provide the evidence using data.