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  • Answer Exercise Regression (278304)

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    Guna Ji
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    A professor analyzed data from a sample of 8 individuals to study the relationship between income (in $1000s) and years of education. The professor calculated: 1) A strong, positive correlation of 0.96 between income and education. 2) A least squares regression line of y=10.617+2.91x, indicating that for each additional year of education, income increases by an average of $2,910. 3) That the regression line explains 92.2% of the variation in income based on education. 4) By conducting a hypothesis test, they rejected the null hypothesis that education has no effect on income at the 5% significance level.

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    A professor analyzed data from a sample of 8 individuals to study the relationship between income (in $1000s) and years of education. The professor calculated: 1) A strong, positive correlation of 0.96 between income and education. 2) A least squares regression line of y=10.617+2.91x, indicating that for each additional year of education, income increases by an average of $2,910. 3) That the regression line explains 92.2% of the variation in income based on education. 4) By conducting a hypothesis test, they rejected the null hypothesis that education has no effect on income at the 5% significance level.

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    6 views3 pages

    Answer Exercise Regression (278304)

    Uploaded by

    Guna Ji
    A professor analyzed data from a sample of 8 individuals to study the relationship between income (in $1000s) and years of education. The professor calculated: 1) A strong, positive correlation of 0.96 between income and education. 2) A least squares regression line of y=10.617+2.91x, indicating that for each additional year of education, income increases by an average of $2,910. 3) That the regression line explains 92.2% of the variation in income based on education. 4) By conducting a hypothesis test, they rejected the null hypothesis that education has no effect on income at the 5% significance level.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 3

    Exercise regression:

    A professor of economics wants to study the relationship between


    income (y in $1000s) and education (x in years). A random sample eight
    individuals are taken and the results are

    Education 16 11 15 8 12 10 13 14
    Income 58 40 55 35 43 41 52 49

    a. Calculate and interpret the value of correlation


    b. Determine the least squares regression line
    c. Interpret the value of the slope of the regression line
    d. Interpret the value of coefficient of determination
    e. Test at 5% the significant of Education
    f. Predict the income if education period is 15 years.

    ANSWERS:

    a) r =0.96
    They are strong, positive relationship between income and education
    b) yˆ=10.617+ 2.91x
    c)For each additional year of education,the income increases by an average of
    2,910.
    d)92.2% variation in y explained by x.

    e) H0:1=0

    H1: 10
    Rejection region: t| > t 0.025,6 =2.447.

    Test statistic: t= 8.439.

    Conclusion: Reject the null hypothesis.


    f) = 10.6165+2.9098(15)

    When x=15, yˆ=54.264.0

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