Question

A social scientist would like to analyze the relationship between educational attainment (in years of higher education) and annual salary (in $1,000s). He collects data on 20 individuals. A portion of the data is as follows:

Salary	Education
35	4
71	1
84	3
52	3
70	7
80	5
107	9
55	0
23	4
33	6
102	6
40	4
67	2
68	5
163	9
55	0
83	8
56	3
125	11
31	0

a. Find the sample regression equation for the model: Salary = β₀ + β₁Education + ε. (Round answers to 3 decimal places.)

Salary= (blank) +(blank)Education

b. Interpret the coefficient for Education.

a. As Education increases by 1 unit, an individual’s annual salary is predicted to decrease by $7,161.

b. As Education increases by 1 unit, an individual’s annual salary is predicted to decrease by $8,590.

c. As Education increases by 1 unit, an individual’s annual salary is predicted to increase by $8,590.

d. As Education increases by 1 unit, an individual’s annual salary is predicted to increase by $7,161.

c. What is the predicted salary for an individual who completed 6 years of higher education? (Round answer to the nearest whole number.)

Answer 1

Above problem is solved using Minitab, Output of Minitab is attached below

a)

Regression Equation

Salary = 37.777 + 7.161 Education

b) Option d represent the correct interpritation.

d. As Education increases by 1 unit, an individual’s annual salary is predicted to increase by $7,161.

c) Predicted salary for individual complicated 6 years of higher education is 80.743

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