Ans to the Question Number 5

x 1=17 years, x 2= 0 (Male), x 3=0 (White)

So, let’s put these values in the estimated regression model

ŷ = 244 + (522 X 17) – (1159 X 0) – (853 X 0)

=9118

So, we can predict that the beginning salary for the employee who is white male and has 17
years of education will get $9118

Ans to the Question Number 6

From output of Minitab

b1 = 521.82 and Sb1 = 79.57

b2 = -1158.9 and Sb2 = 437.9

b3 = -853.3 and Sb3 = 548.2

Level of confidence is (95%)

So the value of Alpha=5%

Area in each tail of the t distribution = (1-0.95)/2 = .025

Degrees of freedom = (n-k-1) = 100-3-1 = 96

From the t distribution table, the value of t for .025 t distribution curve is 1.985

95% Confidence Interval for B1: (b1 ± t X Sb1) = 521.82 ± 1.985 X 79.57

= 524.518 ± 157.94

= 366.578 to 682.458

We are 95% confident that for one extra year of education, the beginning salary changes by an
amount between, $366.578 to $682.458.

95% Confidence Interval for B2:(b2 ± t X Sb2) = -1158.9 ± 1.985 X 437.9

= -1158.9 ± 869.23
= -2028.13 to -289.69

We are 95% confidence that for a change in gender of employee, the beginning salary changes
by an amount between $-2028.13 to $-289.69

95% Confidence Interval for B3: (b3 ± t XSb3) = -853.3 ± 1.985 X 548.2

= -853.3 ± 1088.177

= -1941.477 to 234.877

We are 95% confidence that for a change in minority classification, the beginning salary
changes by an amount between $-1941.477 to $234.877

Answer to the question No 7

Discussion and conclusion:

The estimated regression equation of the beginning salary of the employees is

ŷ = 244 + 522x1 – 1159x2 - 853x3

This equation is obtained from the MINITAB.

The important factors for determining the beginning salary of the employees are:

1. Education

2. Gender

3. Minority

By using this equation, we found out the beginning salary of people of different age groups,
gender, and race based on their education. It is calculated that, a non- white gender is expected
to get $853 less than a white person. A male is expected to get $1159 more than a female and
one year of more educated person is expected to get $522 more beginning salary.

We know, the p-value for each term tests the null hypothesis that the coefficient is equal to
zero (no effect). A low p-value (< 0.05) indicates that you can reject the null hypothesis.

The p-value for the Constant is 0.842. So, we do not reject the null hypothesis.

We can conclude that constant has 84.2% impact in on the beginning salary.

The p-value for the Education is 0.000. So, there is no effect.

We can conclude that Education has no impact in on the beginning salary.

The p-value for the Gender is 0.010. So, we reject the null hypothesis.

We can conclude that Gender has a very less 1% impact in on the beginning salary.

The p-value for the Minority is 0.123. So, we do not reject the null hypothesis.

We can conclude that Minority has 12.3% impact in on the beginning salary. This is a greater
impact compared to education and gender.

The p-value for the Regression is 0.000. So, there is no effect.

We can conclude that regression has no impact in on the beginning salary.

Appendix

Regression Analysis: salbeg versus edlevel, sex, minority

The regression equation is

salbeg = 244 + 522 edlevel - 1159 sex - 853 minority

Predictor Coef SE Coef T P

Constant 244 1218 0.20 0.842
edlevel 521.82 79.57 6.56 0.000
sex -1158.9 437.9 -2.65 0.010
minority -853.3 548.2 -1.56 0.123

S = 1958.14 R-Sq = 45.2% R-Sq(adj) = 43.5%

Analysis of Variance

Source DF SS MS F P
Regression 3 303436256 101145419 26.38 0.000
Residual Error 96 368093914 3834312
Total 99 671530170

Source DF Seq SS
edlevel 1 272202788
sex 1 21942155
minority 1 9291313

Unusual Observations

Obsedlevelsalbeg Fit SE Fit Residual St Resid

2 19.0 17400 10158 425 7242 3.79R
13 17.0 12996 9115 321 3881 2.01R
34 19.0 15996 10158 425 5838 3.05R
38 19.0 14016 10158 425 3858 2.02R
56 8.0 7500 3260 493 4240 2.24R
 67 16.0 12000 7434 406 4566 2.38R

R denotes an observation with a large standardized residual.