A social scientist would like to analyze the relationship between educational at

Question

A social scientist would like to analyze the relationship between educational attainment and salary. He collects the following sample data, where Education refers to years of higher education and Salary is the individual's annual salary (in $1,000s) Education Salary 4 2 5 4 40 53 80 4270 50 110 38 Click here for the Excel Data File a. Find the sample regression equation for the model: Salary = 0 + 1 Education + . (Round intermediate calculations to at least 4 decimal places. Enter your answers in thousands rounded to 2 decimal places.) Education b. Interpret the coefficient for Education. As Education increases by 1 unit, an individual's annual salary is predicted to increase by $9,380 As Education increases by 1 unit, an individual's annual salary is predicted to decrease by $9,380 As Education increases by 1 unit, an individual's annual salary is predicted to decrease by $8,590 As Education increases by 1 unit, an individual's annual salary is predicted to increase by $8,590 c. What is the predicted salary for an individual who completed 7 years of higher education? (Round intermediate coefficient values to 2 decimal places and final answer, in dollars, to the nearest whole number.) Salary

Explanation / Answer

a.

Salary = 22.85 + 9.38 education

b. As education increases by 1 unit, salary increases by $9380.

Option 1

c. Salary = 22.85 + 9.38 * 7 = 88.51

=$88510

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 22.85 7.46 3.06 0.02 4.60 41.10 4.60 41.10 education 9.38 1.62 5.80 0.00 5.42 13.34 5.42 13.34

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