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In: Statistics and Probability

In a multiple regression Y = β0+β1X+β2D, where Y is the annual income (in dollars), X...

In a multiple regression Y = β0+β1X+β2D, where Y is the annual income (in dollars), X is number of years of education, and D is gender (1 for male, and 0 for female). Below is a part of the regression output:

Coefficient p-value
Intercept 24563 0.0054
X 1565 0.0003
D 3215 0.0001
1. Interpret the coefficient of D.

2. Is there a significant difference in the annual incomes earned by male and female?

Solutions

Expert Solution

Answer:-

Given That:-

In a multiple regression Y = β0+β1X+β2D, where Y is the annual income (in dollars), X is number of years of education, and D is gender (1 for male, and 0 for female).

1. Interpret the coefficient of D.

Interpret the coefficient of D.

The coefficient of D or the slope of the regression equation is given as 3215 which indicate increment in the annual income due to male.

2. Is there a significant difference in the annual incomes earned by male and female?

Yes, there is a significant difference in the annual incomes earned by male and female, because the corresponding p-value for the regression slope is given as 0.0001 which is less than alpha value 0.05.

So, we reject the null hypothesis and concluded that there is a significant difference in the annual incomes earned by male and female.

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