In: Economics
Given the following regression equation with dependent variable is NHL player salaries (with t-statistics in parentheses:
Salary = 566,400 + 71,928 Goals + 20,403 Assists + 98,430 All-Star (3.45) (2.96) (3.5) (1.30)
R2 = 0.95
where: Salary= NHL Salary in $
Goals= Number of career goals
Assists = Number of career assists All-Star =1 if
All-Star in the previous season, 0 otherwise.
A. Interpret the R2.
B. Interpret the each of the coefficient—What do they mean (do they make sense?) Are they statistically significant? What is economic significance of each?