os. Suppose that the board of directors of X-Innovation, Inc. believe that the a
ID: 3065598 • Letter: O
Question
os. Suppose that the board of directors of X-Innovation, Inc. believe that the annual salary is related to years of experience and to the score on the programmer aptitude test. An econometrician conducted a study for this corporation and reported the following results. Annual Salary ($1,000)-7.29+1.148. Years of experience+0.260 Aptitude Test Score p-value (0.009) (0.034) (0.0014) R-square 0.92 F-stat-96.88 p-value- 0.000 Provide the accurate interpretation of the estimated coefficients associated with years of experience and aptitude test score. a. Discuss the significance of the estimated coefficients associated with years of experience and aptitude test score b.Explanation / Answer
a) Years coefficient = 1.148
The coefficient tells us that if years of experience increases by 1.148 years, annual salary increases by 1000 * 1.148
Aptitude = 0.260
The coefficient tells us that if aptitude score increases by 0.260, annual salary increases by 1000 * 0.260
b) years p value = 0.034
If we assume alpha = 0.05, p value < alpha and thus null is rejected and coefficient is significant.
aptitude p value = 0.0014
If we assume alpha = 0.05, p value < alpha and thus null is rejected and coefficient is significant.
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