Using data from 50 workers, a researcher estimates Wage = Bo + B1 Education + B2

Question

Using data from 50 workers, a researcher estimates Wage = Bo + B1 Education + B2Experience +B3Age + , where Wage is the hourly wage rate and Education, Experience, and Age are the years of higher education, the years of experience, and the age of the worker, respectively. A portion of the regression results is shown in the following table. Intercept Education Experience Age Coefficients 6.08 1.24 0.48 -0.04 3 Standard Error 4.15 0.34 0.18 0.09 t Stat 1.47 3.65 2.67 -0.44 p-Value 0.1497 0.0007 0.0105 0.6588 a-1. Interpret the point estimate for B1- O As Education increases by 1 unit, Wage is predicted to increase by 0.48 units, holding Age and Experience constant. O As Education increases by 1 unit, Wage is predicted to increase by 0.48 units. O As Education increases by 1 unit, Wage is predicted to increase by 1.24 units. O As Education increases by 1 unit, Wage is predicted to increase by 1.24 units, holding Age and Experience constant. a-2. Interpret the point estimate for B2. O As Experience increases by 1 unit, Wage is predicted to increase by 1.24 units. O As Experience increases by 1 unit, Wage is predicted to increase by 0.48 units. O As Experience increases by 1 unit, Wage is predicted to increase by 1.24 units, holding Age and Education constant. O As Experience increases by 1 unit, Wage is predicted to increase by 0.48 units, holding Age and Education constant. b. What is the sample regression equation? (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) }= Education + Experience + Age Predict the hourly wage rate for a 37-year-old worker with 4 years of higher education and 2 years of experience. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Explanation / Answer

a-1) as education increase by one unit ; wage is predicted to increase by 1.24 units ; holding age and experience constant

a-2) as experience increase by one unit ; wage is predicted to increase by 0.48 units ; holding age and eduaction constant

b) yhat=6.08+1.24*education+0.48*experience+(0.04)*age

c) predicted value ==6.08+1.24*4+0.48*2+(0.04)*37=13.48

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