What is the market value of the MBA degree in a dollar amount? Is it statistical
ID: 3063553 • Letter: W
Question
What is the market value of the MBA degree in a dollar amount? Is it statistically significant at the 5% level? Explain your answer with reference to a p-value.
Consider the following data on salaries and experience. Persons 2,4,6,8,and 9 have MBA degrees. All others only have undergraduate degrees.
Person Salary Experience
1 $130,468 10 Years
2 62,250 1
3 50,000 2.3
4 140,000 9
5 110,000 8
6 80,050 2.8
7 95,772 7
8 110,000 6
9 87,752 4.2
10 79,290 5
1 Sala 2 130468 3 62250 4 50000 5 140000 6 110000 7 80050 8 95772 9 110000 10 87752 11 79290 12 13 Experience(X 10 Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.92 0.85 0.83 11635.94 10.00 2.3 2.8 ANOVA F Significance F 0.00 MS 4.2 Regression Residual Total 1.00 8.00 9.00 6268865526.69 6268865526.69 46.30 1083160212.91 135395026.61 7352025739.60 Coefficients Standard Erron t Stat 5.71 6.80 p-value | 0.00 0.00 Lower 95% 27351.14 5817.36 | Upper 95% | Lower 95.0% | Upper 95.0% 27351.14 5817.36 15 Intercept X Variable 1 45897.13 8042.48 64443.11 64443.11 8799.47 1293.19 11781.58 11781.58 The Regression Equation is Y-45897.13+8799.47*X 19 Here , P value is less than alpha=0.05, we reject the null hypothesis. The model is significant at 5% level Here 85% variation explained by salar on MBA Experience personsExplanation / Answer
The regression equation is
y=a+bx
from Excel
y=45897+8799(x)
Slope=8799
If we increase 1 unit in x then there is 8799units increase in y
SInce p<0.05, we reject the H0. Hence model is significant.
Coefficient of determination =0.85
85% of variation in y is due to x.
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