Homework SourseUsing data from 50 workers a researcher estimates Wage 0 1
Using data from 50 workers, a researcher estimates Wage = 0 + 1 Education + 2 Experience +3 Age + , where Wage is the hourly wage rate and Education, Experience, and Age are the years of higher education, the years of experience, and the age of the worker, respectively. A portion of the regression results is shown in the following table.
What is the sample regression equation? (Negative value should be indicated by a minus sign. Round your answers to 2 decimal places.)
What is the predicted value for Age = 39, Education = 3 and Experience = 2. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
| Coefficients | Standard Error | t Stat | p-value | |
| Intercept | 7.73 | 3.94 | 1.54 | 0.0552 |
| Education | 1.15 | 0.39 | 4.48 | 0.0002 |
| Experience | 0.45 | 0.11 | 3.30 | 0.0025 |
| Age | 0.03 | 0.09 | 0.12 | 0.7580 |
Solution
a-1 The estimation for beta1 will be simply given by the coefficient of education. Thus 1.15 is the correct answer.
a-2 The coefficient also determines how much estimated wage will increase as education increases. Thus the correct answer would be as education increases by 1 unit wage is predicted to be increased by 1.15 units holding age and experience constant.
a-3. Point estimate for beta2 will be simply the coefficient of experience. Thus the correct answer would be 0.45.
a-4. Its interpretation would be as experience increases by 1 unit, wage is predicted to be increased by 0.45 units, holding age and education constant.
b Sample regression equation will be,
Y-hat=7.73+1.15 education +0.45 experience +(-0.03) age
c.
Y-hat=7.73+1.15*3+0.45*2-0.03*39 =10.91
