PROJECT ON MULTIPLE REGRESSIONS

Course Title: Applied Statistics

Course Code: BUS173
Section: 08

Submitted To:
Dr. Khandakar Munim

Professor
Department of Management
North South University

Submitted By:
Rashaduzzaman Riad
ID: 1811530030

Introduction:
Page 1
I want to investigate the effect of education (x1), sex of employee (x2), work experience(x3),and
minority classification(x4) on the beginning salary (^y ) of the employees on a company.

Regression Equation:

The estimated regression equation of the beginning salary on the education, sex of employee,
work experience and minority classification is
^y = a+b1x1+b2x2+b3x3+b4x4
Beginning Salary = -1668.163+ (640.468× Education Level) + (-1250.240× Sex of Employee) +
(75.995× Work Experience) + (-905.308× Minority Classification)

The estimated regression coefficients (slope) values:

Explanation on the estimated regression coefficient values:

First of all x1 represent Education of Employees, x2 represent Sex of Employee,x 3 represent Work
Experience and x4 represent Minority Classification.
For the value of a= -1668.163 in the estimated regression equation gives the value of y if x 1=0,
x2=0,x3=0,and x4=0 that is on average the beginning salary of employees with no education, no sex
biasness no work experience and no effect on minority will earn -1668.163 dollars.
Male (0)
Sex of Employee
Female (1)

Education (years)
Work Experience (years)

White (0)
Minority Classification
Non-white (1)

Page 2
*The value of b1(Education Level) = 640.468 in the estimated regression model gives the change
in y for one-unit change in x1,x2, x3, and x4 are held constant. Thus, we can state that if the
Education Level increases by one unit and the sex of the employee, work experience and minority
classification remain constant. So on an average the beginning salary will be increased by
$640.468.

*The value of b2(Sex of Employee) = -1250.240 in the estimated regression model gives the
change in y for one-unit change in x1,x2, x3, and x4 are held constant. Thus, we can state that if the
sex of employee is 0 (female) and the education level, work experience minority classification
remain constant. So on an average the beginning salary will be reduced by -1250.240
If the employee is 1 (male) then the salary will increased.

*The value of b3(Work Experience) =75.995 in the estimated regression model gives the change
in y for one-unit change in x1,x2, x3 and x4 are held constant. Thus, we can state that if the work
experience of employee increases by one unit and the education level, sex of employee and
minority classification remain constant. So on an average the beginning salary will be increased
by $75.995
*The value of b4 (Minority Classification) = -905.308 in the estimated regression model gives the
change in y for one-unit change in x1,x2, x3 and x4 are held constant. Thus, we can state that if the
race of employee is 1 (Non White) and the education level, sex of employee ,work experience
remain constant. So on an average the beginning salary will be reduced by -905.308
If the employee is 0 (White) then the salary will increased.
[All the values are found from the Coefficients table of our Analysis]

The coefficient of multiple determination, and the adjusted coefficient of

multiple determination are given in SPSS solution:

The coefficient of multiple determinant, R2 = 0.415

0.415 (41.50%) indicates that the model explains very less of the variability of the response data
around it's mean. In general, higher the value of the R 2 better the model fits the data. The more
variance that is accounted for by the regression model, the closer the data points will fall to the
fitted regression line. Moreover, 41.50% of the total variation in the beginning salary is explained
Page 3
by education, gender and minority classification and the rest 58.50% variation depends on other
factors.
[Values are taken from the Model Summary table of our Analysis]

The predicted beginning salary for the employee who is non-white male, and
has 17 years of education and 10 years of work experience:

The formula which we get

^y = a+b1x1+b2x2+b3x3+b4x4………………………………….. (1)
Now, the predicted given salary for the employees non-white male, and has 17 years of education
and 10 years of work experience will be
^y = = -1668.163+ (640.468×17) + (-1250.240×0) + (75.995×10) + (-905.308×1) [from 1]
=9074.435

95% confidence intervals for the regression coefficients are:

For B1(Education Level)

b1 ± tsb1

= 640.468± (9.302×68.853)
= 640.468±640.470606
= -0.0026 to 1280.9386
So, It’s 95% sure that beginning salary depend on education level of employee. Salary range
between -0.0026 to 1280.9386

For B2 (Sex of Employee)

B2 ± tsb2

= -1250.240± (-3.279×381.271)
= -1250.240 ±1250.187609
= -2500.43 to -0.0523

Page 4
So, It’s 95% sure that beginning salary depend on sex of employee. Salary range between
-2500.43 to -0.0523 dollar.

For B3 (Work Experience)

B3± tsb3

= 75.995 ± (3.427× 22.178)

= 75.995 ± 76.00
= -0.005 to 151.995
So, It’s 95% sure that beginning salary depend on work experience of employee. Salary range
between -0.005 to 151.995 dollar.

For B4 (Minority Classification)

B4± tsb4

= -905.308 ± (-2.032× 445.531)

= -905.308 ± 905.3189
= -1810.62 to .0109
So, It’s 95% sure that beginning salary depend on race of employee. Salary range between
--1810.62 to .0109 dollar.

[All the values are found from the Coefficients table of our Analysis]

Discussion and conclusion

The association between dependent and independent variables [use sign of the
estimated regression coefficients:

In this project I have analyzed one dependent variable “Beginning Salary” (y) versus four
independent variables: Educational Level (x1), Age of Employee (x2), Sex of Employee (x3 ) and
Minority Classification (x4 ). Our sample size was 230. The coefficient of x1 is 640.468, it has a
positive correlation with the dependent variable y, meaning that with one year increase in
educational level the Beginning salary increases by $640.468. The coefficient of (x2), is

Page 5
-1250.240, it has a negative correlation with y, 0 represents male and 1 represents female, if the
employee is a female then the salary of the employee decreases by $1250.240. The coefficient of
(x3 ) is 75.995, it also has a positive correlation with the dependent variable y, and it means if the
working experience increases by one year, then the beginning salary increases by $75.995.The
final independent variable (x4 ). is the Minority Classification with coefficient
-905.308, if the employee is non-white then x4 = 1, if the employee is white then x4 =0, hence if
the employee is nonwhite, then their salary decreases by $905.308.

The significant (important) factors for determining the beginning salary of the
employees on the basis of our results obtained from the analysis [use p-values]:

let`s have a significance level of α =0.01

It is observed from the analysis that educational level (p- value =0.000), Sex of employee (p-
value =0.001) and working experience (p- value =0.001) are the significant factor of beginning
salary.
It is also observed from the analysis that minority classification (p- value =0.043) is not a
significant factor of beginning salary .since minority classification of p-value is not less than α.

Page 6
 REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT salbeg
/METHOD=ENTER edlevel sex work minority.

Regression

Notes
Output Created 31-AUG-2019 18:06:22
Comments
Input Data C:\Users\Hp\Desktop\g4.
sav
Active Dataset DataSet1
File Label SPSS/PC+
Filter <none>
Weight <none>
Split File <none>
N of Rows in Working Data 230
File
Missing Value Handling Definition of Missing User-defined missing
values are treated as
missing.
Cases Used Statistics are based on
cases with no missing
values for any variable
used.
Syntax REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF
OUTS R ANOVA
/CRITERIA=PIN(.05)
POUT(.10)
/NOORIGIN
/DEPENDENT salbeg
/METHOD=ENTER
edlevel sex work minority.
Resources Processor Time 00:00:00.03
Elapsed Time 00:00:00.11

Page 7
 Notes
Memory Required 4320 bytes
Additional Memory Required for Residual
0 bytes Plots

a
Variables Entered/Removed
Variables Variables
Model Entered Removed Method
1 MINORITY . Enter
CLASSIFICA
TION,
EDUCATION
AL LEVEL,
WORK
EXPERIENC
E, SEX OF
b
EMPLOYEE

a. Dependent Variable: BEGINNING SALARY

b. All requested variables entered.

Model Summary
Adjusted R Std. Error of the
Model R R Square Square Estimate
a
1 .644 .415 .405 2577.086

a. Predictors: (Constant), MINORITY CLASSIFICATION, EDUCATIONAL

LEVEL, WORK EXPERIENCE, SEX OF EMPLOYEE

ANOVAa
Sum of
Model Squares df Mean Square F Sig.
b
1 Regression 1060124400 4 265031100.1 39.906 .000
Residual 1494308367 225 6641370.518
Total 2554432767 229
a. Dependent Variable: BEGINNING SALARY
b. Predictors: (Constant), MINORITY CLASSIFICATION, EDUCATIONAL LEVEL, WORK EXPERIENCE,
SEX OF EMPLOYEE
 Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -1668.163 1100.650 -1.516 .131
EDUCATIONAL LEVEL 640.468 68.853 .535 9.302 .000
SEX OF EMPLOYEE -1250.240 381.271 -.187 -3.279 .001
WORK EXPERIENCE 75.995 22.178 .185 3.427 .001
MINORITY -905.308 445.531 -.106 -2.032 .043
CLASSIFICATION

a. Dependent Variable: BEGINNING SALARY

Page 9