Based on a sample of the salaries of professor at a major un

Based on a sample of the salaries of professor at a major university you have performed a multiple linear regression relating salary to years of service and gender the date included information on the following variables Salary Salary in thousands of dollars Years Years of service Gender 1 the professor mate 0 if the professor is female The estimated multiple linear regression model Salary = 45 + 3(Years) + 4(Gender) + l(Year)(Gender). Using the multiple linear regression equation, what would you estimate the average difference in the salaries of a male professor with 3 years of service and a female professor with 3 years of service to be? Select one: $3000 $5000 $7000

Solution

Ans: Taking the female as a reference level. The salary of female frofessor is

Salary(female)=45+3*3+4*0+3*0=54

Salary of male is

Salary(male)=45+3*3+4+3=61.

Therefore, the difference of salary is 61-54=7, i.e., the differece salary is $7000.

Ans: (c) $7000.