Question

Here is some data looking at people's salaries, their years of experience, and their average evaluation. Please cut and paste it into excel and run the following regression: Salary = b0 + b1*Experience + b2*Eval Salary Years of experience Average evaluation $ 56,744.30 5 6.85 $ 49,875.12 0 2.92 $ 64,629.44 6 1.69 $ 53,148.67 2 1.89 $ 56,130.69 8 4.93 $ 57,246.71 4 5.87 $ 51,097.09 0 5.09 $ 50,303.00 0 6.42 $ 56,212.37 2 4.2

True/false. The eval score is a significant predictor of salary at the 5% level.

True

False

Answer 1

Solution:

In excel go to

Data>Data analysis>regression

you will get

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.804387228
R Square	0.647038813
Adjusted R Square	0.529385084
Standard Error	3167.333553
Observations	9
ANOVA
	df	SS	MS	F	Significance F
Regression	2	1.1E+08	55171176	5.4995181	0.043972469
Residual	6	60192011	10032002
Total	8	1.71E+08
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	54187.6859	3044.864	17.79642	2.023E-06	46737.17125	61638.2
Years of experience	1206.385977	384.0964	3.140842	0.0200465	266.5359348	2146.236
Average evaluation	-624.0392499	589.5046	-1.05858	0.3305343	-2066.505	818.4265

For avergae evaluation

t=-1.05858

p=0.3305

p>0.05

Not significant predictor at 5% level of signifcance.

he eval score is NOT a significant predictor of salary at the 5% level.

FALSE