Question

I would like to know what factors influence the annual income of a person. What are some of the variables you will look for? How would you collect data on these variables? Is the data qualitative or quantitative? Remember that for each person you find the income of, you should be able to identify the value of the variable you mention above, in order to run a regression. For example, you can say annual income depends on Education. If you think of education as a qualitative variable, one value of the variable "education" may be "Undergraduate degree". You could also think of Education as a quantitative variable in which case, one value of the variable could be 10 years of education, and so on. Another example is character. You could say income depends on the character or personality type. But this variable is going to be hard to measure and hence "useless" in predicting income. So, come up with variables that you can actually collect data on.

Let's say I run a regression with income as the dependent variable and race as the independent variable. My results indicate that race is a "significant" variable. Then, I run another regression, again with income as the dependent variable. But this time with both race and education as the independent variables. My results now indicate that race is NOT a "significant" variable, but education is a significant variable. What is your conclusion from these results I obtained? What will be your next step? Does Race really affect income, or it has no influence? Each regression suggests one way or the other. So, are regressions even reliable?

please do not use any other chegg answers. in own words thank you

Answer 1