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Data are available from the National Longitudinal Study of Youth (NLSY). Summary

ID: 3271508 • Letter: D

Question

Data are available from the National Longitudinal Study of Youth (NLSY). Summary data are available for college graduates from ten college majors (excluding engineering); for each major, data are available for the graduates’ average college GPA, their average annual income, average SAT math score, average SAT verbal score, and number of students who had chosen that major (https://www.iwu.edu/economics/PPE17/oehrlein.pdf ).

Major

Average GPA

Average Income

Average SAT Math

Average SAT Verbal

Sample Size

Biology

3.171

$        16,692

567.55

554.79

113

Business

3.054

$        23,733

537.62

520.03

459

Communications

3.057

$        19,612

529.08

535.20

133

Computer Science

3.015

$        24,623

571.51

537.79

152

Criminology

2.992

$        21,170

448.68

477.63

96

Education

3.101

$        17,817

493.50

500.00

218

Art

3.183

$        17,969

564.10

576.92

127

Nursing

3.140

$        19,502

531.75

522.22

129

Health

3.106

$        20,640

535.96

530.70

121

Psychology

3.200

$        17,167

554.08

579.59

141

What is a “reasonable guess” for the average error when predicting average income for a given college major?

A. $551

B. $1744

C. $2692

D. $5515

E. $851

Major

Average GPA

Average Income

Average SAT Math

Average SAT Verbal

Sample Size

Biology

3.171

$        16,692

567.55

554.79

113

Business

3.054

$        23,733

537.62

520.03

459

Communications

3.057

$        19,612

529.08

535.20

133

Computer Science

3.015

$        24,623

571.51

537.79

152

Criminology

2.992

$        21,170

448.68

477.63

96

Education

3.101

$        17,817

493.50

500.00

218

Art

3.183

$        17,969

564.10

576.92

127

Nursing

3.140

$        19,502

531.75

522.22

129

Health

3.106

$        20,640

535.96

530.70

121

Psychology

3.200

$        17,167

554.08

579.59

141

Explanation / Answer

when Average Income is taken as dependent variable

and Average GPA as independent variable

standard error = 1743.97237

hence option B) 1744 is correct

SUMMARY OUTPUT Regression Statistics Multiple R 0.791819441 R Square 0.626978026 Adjusted R Square 0.58035028 Standard Error 1743.97237 Observations 10 ANOVA df SS MS F Significance F Regression 1 40896589.48 40896589 13.44646 0.006337 Residual 8 24331517.02 3041440 Total 9 65228106.5 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 111997.4617 25123.70805 4.45784 0.002117 54062.09 169932.8 54062.09 169932.8 Average GPA -29693.079 8097.506173 -3.66694 0.006337 -48366 -11020.2 -48366 -11020.2