3. HW 12 Estimate: Wage = 0 + 1 EDUC + 2 EXPER + 3 AGE + . (Negative values shou

Question

3. HW 12

Estimate: Wage = 0 + 1EDUC + 2EXPER + 3AGE + . (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)

Predict the hourly wage of a 40-year-old employee who has 5 years of higher education and 8 years of experience. (Round intermediate coefficient values and final answer to 2 decimal places.)

A researcher interviews 50 employees of a large manufacturer and collects data on each worker’s hourly wage (Wage), years of higher education (EDUC), experience (EXPER), and age (AGE). The data can be found on the text website, labeled Hourly Wage.

Explanation / Answer

a)
The regression equation is
Wage = 7.87 + 1.44 EDUC + 0.448 EXPER - 0.0114 AGE

b) Edu Yes
Exper Yes
Age No

c) Correct answer: For a 1 year increase in higher education, wage is predicted to increase by $1.44/hour holding experience and age constant.

d) Correct Answer: 34.24% of the sample variation in wage is explained by the estimated regression model.

e)
Wage = 7.87 + 1.44 *5 + 0.448 *8 - 0.0114 *40= 18.189

f) No

g)
EdU Yes
Exper Yes
Age No

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