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we are interested in studying how years of EDUCATION (x1), years of EXPERIENCE (

ID: 3045761 • Letter: W

Question

we are interested in studying how years of EDUCATION (x1), years of EXPERIENCE (x2) and AGE (x3) are related to a person's SALARY (y). So we gather sample of 30 people and use Excel to run the linear regression and get the results below:

Age

-1000

What would be the estimated salary for someone who is 40 years old, has 13 years of education and has 5 years of experience?

800

Coefficients Standard Error Intercept 20000 15000 Education 1800 850 Experience 2000 1200

Age

-1000

What would be the estimated salary for someone who is 40 years old, has 13 years of education and has 5 years of experience?

800

Explanation / Answer

Solution

Y = intercept + education coeff (x1) + experience coeff (x2) + Age coeff (x3)

Y = 20000 + 1800(13) + 2000(5) - 1000(40) = 13400