1) (32pt) Starting salaries for accountants in Tampa follow those of many U.S. c
ID: 3054722 • Letter: 1
Question
1) (32pt) Starting salaries for accountants in Tampa follow those of many U.S. cities. The table bellow shows starting salaries (in thousands of dollars) and the cost of living index for 3 metropolitan areas. A regression analysis will help provide explanation on how cost of living explains salary in this sample. 30 Thousands$ 25 20 15 a. (4pt) Explain what the scatter diagram for cost of living 10 Salary in and salary indicates about the relationship of thesc variables 0 20 40 60 80 Cost of Living Index b. (10pt)Use the least squares method (OLS) to develop an estimated regression equation for this problem (That is, calculate bo and bl) Salary (thousand S) 19 10 27 29 Metropolitan area Index Oklahoma City4619 l'ampa Atlanta Sacramento Honolulu 35 50 65 59 25 51.0 Mean 22.0 c. (2pt) Write down the estimated regression equation d. (4pt)Provide an interpretation for the slope. (10pt)Provide an interpretation for the intercept of the estimated regression equation. c.Explanation / Answer
1)
a) the scatter diagram shows that as the cost of living incresaes the starting salary increases .
b)
c) estimated regression equation: salary= -8.48+0.6 index
d)slope is positive in nature i.e. +0.6 it mean as the index or the order of metropolitan area increases the starting salary increases by a multiple of 0.6 of the order.
e) intercept is negative in nature. it mean the starting salary would be deducted by $8.48 thousand from what predicted from the index of the city.
SUMMARY OUTPUT Regression Statistics Multiple R 0.905918994 R Square 0.820689224 Adjusted R Square 0.77586153 Standard Error 3.252589091 Observations 6 ANOVA df SS MS F Significance F Regression 1 193.6826568 193.6827 18.30764 0.01286 Residual 4 42.31734317 10.57934 Total 5 236 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept -8.487084871 7.247918529 -1.17097 0.306609 -28.6105 11.63636 -28.6105 11.63636 index 0.597785978 0.139710664 4.278743 0.01286 0.209887 0.985685 0.209887 0.985685Related Questions
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