Question

1. Part (a)            (1 point)

Using the “Experience and Income.xlsx” file, determine the sample correlation coefficient between the annual salary and the job market experience variables.

You must submit your actual Excel file with the output as part of the assignment.

Answer is in excel sheet

Part (b)            (2 points)

Interpret the sample correlation coefficient you found in part (a).

Part (c)            (2 points)

If we regressed income on experience, what share of the variation in income could be explained by the variation in experience? Explain how you found your answer.

please help with part c!!

Annual Salary	Years of Job Market Experience
83601	18
29736	47
50235	12
22133	10
21994	24
29390	18
17694	38
26795	44
19981	54
14476	3
19452	3
28168	17
19306	34
13318	25
25166	10
18121	18
13162	6
32094	14
16667	4
50171	39
31691	13
36178	40
15234	4
16817	26
22485	22
30308	10
11702	6
11186	0
12285	42
19284	3
11451	8

the entire graph does not fit

Answer 1

a) The sample correlation coefficient between annual salary and experience is r = 0.161 (rounded to 3 decimal places)

b) The sample correlation coefficient expresses that there is almost none or a very weak correlation between experience and annual salary

c) Here, we found the value of R square or the value of the coefficient of determination to be 0.02578, which means that only 2% of the variation in income could be explained by the variation in experience. Here, since R-square or the coefficient of determination is the proportion of the variance in the dependent variable that is predictable from the independent variable.

(The above calculations are done using R-software, the image of code and output are attached below).