1) Makin-Easy job-consulting company believes that in general people with a prof

Question

1) Makin-Easy job-consulting company believes that in general people with a professional training earn more money than the people who have received less/no training. To verify this statistically, the company collected a sample of data from the employces of various companies and used two variables: 'level of training' and 'income' of the employees for a regression analysis. The coefficient of determination (R) value it got was 0.93. (6 points) A) What was taken as the explanatory variable? B) In which scale level of training was measured? C) What type of data (time-series or cross-section) the company collected? D) Interpret the R2 value.

Explanation / Answer

A) Here the explanatory variable is "INCOME"

B) Level of training is dependent variable and it is measured by binary(less/no) (ordinal scale)

C) It is not time series data. It is a cross -section data

D) R2 = 0.93 = 93% of variation in the dependent variable (level of training) was explained by the independent variable(Income)

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