A5 The model below explains CEO salary (salary) expressed in thousands of pounds as a function of a firm’s sales in million pounds (sales), the return on a firm’s equity (roe), and the industry in which the firm is operating. There are two industries in the sample, services and consumer goods. These industries are captured respectively by two dummy variables, service and goods. The regression based on a sample of 209 firms is as follows: salary = 4.5 + 0.27sales + 0.015roe – 0.08service (0.24) (0.03) (0.05) (0. 05) R-squared = 0.35 SSR(Residual Sum of Squares) = 42.9 Implement an F-test for whether the determinants of CEO salaries differ significantly between service and consumer goods industries. What do you conclude?
A5 The model below explains CEO salary (salary) expressed in thousands of pounds as a function of a firm’s sales in million pounds (sales), the return on a firm’s equity (roe), and the industry in which the firm is operating. There are two industries in the sample, services and consumer goods. These industries are captured respectively by two dummy variables, service and goods. The regression based on a sample of 209 firms is as follows: salary = 4.5 + 0.27sales + 0.015roe – 0.08service (0.24) (0.03) (0.05) (0. 05) R-squared = 0.35 SSR(Residual Sum of Squares) = 42.9 Implement an F-test for whether the determinants of CEO salaries differ significantly between service and consumer goods industries. What do you conclude?
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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A5
The model below explains CEO salary (salary) expressed in thousands of pounds as a function of a firm’s sales in million pounds (sales), the return on a firm’s equity (roe), and the industry in which the firm is operating. There are two industries in the sample, services and consumer goods. These industries are captured respectively by two dummy variables, service and goods.
The regression based on a sample of 209 firms is as follows:
salary = 4.5 + 0.27sales + 0.015roe – 0.08service
(0.24) (0.03) (0.05) (0. 05)
R-squared = 0.35
SSR(Residual Sum of Squares) = 42.9
Implement an F-test for whether the determinants of CEO salaries differ significantly between service and consumer goods industries. What do you conclude?
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