Question 549:

Asked on December 10, 2008

Tags: Regression Analysis , Regression Equation

1

Answer:

No answer provided yet.

The regression equation has all significant predictors (p <.01) and the fit of the model is very good with the Adjusted R² being .809 or 80.9% of the variation in salary is explained by these predictors. We see the regression equation as Salary = -3,816,521 + 1.948(Year) -826(YearHire)  -2093(Race) -6438(Rank).

 

To test to see if there is evidence of differences in salary based on race, we can see that by making race equal to black (1) we subtact -2093 from the salary. If we make race equal to non-black (0) we get 0 subtracted from the salary. Based on that evidence it would suggest there is a difference in pay by race.

 

Note: The numbers see a little odd as if you fully evaluate the equation you get negative salaries.