Question

In: Economics

Given the following regression equation with dependent variable is NHL player salaries (with t-statistics in parentheses:...

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?

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