A regression of average weekly earnings (AWE, measured in dollars) on age (measu

Question

A regression of average weekly earnings (AWE, measured in dollars) on age (measured in years) using a random sample of college-educated full-time workers aged 25-65 yields the following: AWE = 675.7990 + 9.31 20x Age, R -0.022, SER = 605.4. The coefficient shows the marginal effect of Age on AWE; that is, AWE is expected to increase by Sfor each additional year of age. is the intercept of the regression line. It determines the overall level of the line Round your responses to four decimal places)

Explanation / Answer

Consider the given regression model which is given below.

=> AWE = 675.7990 + 9.3120*AGE, where “AWE = Average weekly earning”.

The coefficient “9.3120” shows the marginal effect of “AGE” on “AWE” is expected to increase by “$9.3120” for each additional year of age.

The intercept is “675.7990” of the regression line. We will get the intercept by putting “AGE=0”, the value of “AWE = 675.7990”.

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