A professor of industrial relations believes that an individual\'s wage rate at

Question

A professor of industrial relations believes that an individual's wage rate at a factory (Y) depends on his performance rating (X_1) and the number of economics courses the employee successfully completed in college (X_2). The professor randomly selects 6 workers and collects the following information: Referring to Table 14-2, suppose an employee had never taken an economics course and managed to score a 5 on his performance rating. What is his estimated expected wage rate? A. 12.20 B. 17.23 C. 10.90 D. 25.11

Explanation / Answer

The statistical software output for multiple linear regression is:

Multiple linear regression results:
Dependent Variable: y
Independent Variable(s): x1, x2
y = 6.9319023 + 1.0543526 x1 + 0.61601707 x2

Parameter estimates:

Hence,

Regression equation will be:

y = 6.932 + 1.0544 x1 + 0.616 x2

For x1 = 5, x2 = 0

y = 6.932 + 1.054 (5) + 0.616 (0)

y = 12.20

Option A is correct.

Parameter Estimate Std. Err. Alternative DF T-Stat P-value Intercept 6.9319023 1.5548583 0 3 4.4582213 0.021 x1 1.0543526 0.24588628 0 3 4.2879683 0.0233 x2 0.61601707 0.17373708 0 3 3.5456856 0.0382

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