First year student is wondering if there is any reason why one should get an education because he thinks there is no difference in earnings between the two. But Gilbert and Aaron think education has an impact on how much one earns. Gilbert and Aaron then decided to collect data from 10 people on the number of years they had spent in school and their monthly income. The following is the data they collected. ID Income Years of schooling 1 3,000 14 2 4,500 16 3 17,000 8 4 8,000 16 5 6,500 12 6 10,000 6 7 20,000 18 8 5,500 15 9 10,000 3 10 1,000 13 Using the table above, answer the following questions; a. Calculate the b coefficient b. Calculate the a coefficient c. Estimate how much someone who has i. 0 years of schooling will earn ii. 20 years of schooling will earn
First year student is wondering if there is any reason why one should get an education because he thinks there is no difference in earnings between the two. But Gilbert and Aaron think education has an impact on how much one earns. Gilbert and Aaron then decided to collect data from 10 people on the number of years they had spent in school and their monthly income. The following is the data they collected.
ID Income Years of schooling
1 3,000 14
2 4,500 16
3 17,000 8
4 8,000 16
5 6,500 12
6 10,000 6
7 20,000 18
8 5,500 15
9 10,000 3
10 1,000 13
Using the table above, answer the following questions;
a. Calculate the b coefficient
b. Calculate the a coefficient
c. Estimate how much someone who has
i. 0 years of schooling will earn
ii. 20 years of schooling will earn
d. Based on your answers in C above, what would be your conclusion to this debate? Is there an association between years of schooling and monthly income? Justify your answer
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