Exercise 14-21 Algo A social scientist would like to analyze the relationship be

Question

Exercise 14-21 Algo A social scientist would like to analyze the relationship between educational attainment and salary. He collects the following sample data, where Education refers to years of higher education and Salary is the individual's annual salary (in $1,000s): Salary Find the sample regression equation for the model. Salary Ap + ,Education + .. (Round intermediate calculations to at least 4 decimal places. Enter your answers in thousands rounded to 2 decimal places.) b Interpret the coefficient for Education. As Education nceases by 1 unit, an individuars annual salary is predicted to decrease by $8,000 OAs Education increases by 1 unit, an individual's annual salary is predicted to increase by $8,000 OAs Education increases by 1 unit, an individual's annual salary is predicted to decrease by $7,000. As Education increases by 1 unit, an individual's annual salary is predicted to increase by $7,000 What is the predicted salary for an individual who completed 9 years of higher education (Round intermediate coefficient values to 2 decimal places and final answer, in dollars, to the nearest whole number.)

Explanation / Answer

Salary = 27.25 + 7 * Education

Interpritation-

As Education increases by 1 unit, an individual's annual salary is predicted to increases by $7000

Predicted salary for an individual who completed 9 years of higher education is,

Salary = 27.25 + 7 * Education

Salary = 27.25 + 7 * 9

Salary = 90.25

Salary = $ 90 rounded to nearest whole numberds

that is $ 90000

Education Salary 3 43 SUMMARY OUTPUT 4 46 6 72 Regression Statistics 2 32 Multiple R 0.790245 5 61 R Square 0.624488 4 39 Adjusted R Square 0.561903 8 99 Standard Error 14.36141 0 50 Observations 8 ANOVA df SS MS F Significance F Regression 1 2058 2058 9.978182 0.019594 Residual 6 1237.5 206.25 Total 7 3295.5 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 27.25 10.21532 2.667563 0.037147 2.254023 52.24598 2.254023 52.24598 X Variable 1 7 2.216013 3.158826 0.019594 1.577611 12.42239 1.577611 12.42239

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