QUESTION 5 Consider the variables monthly salary in hundreds of dollars (Y) and years of education (X). Basic labor economics theory tells us, that among many variables, education is an important determinant of wages. In the table given we provide the necessary raw data to estimate the quantitative impact of education on wages. Carry out the following regression analysis: Obs Y 1 4.4567 5.77 5.9787 7.3317 7.3182 6.5844 7.8182 7.8351 11.0223 3 4 9. 5 10 11 12 8 13 14 10 10.6738 15 10.8361 13.615 13.531 11 16 17 18 12 13 Sum 112.7712 156 Calculate the following: a. B, and B. Interpret each coefficient. b. Covariance between X and Y. c. The correlation coefficient.
QUESTION 5 Consider the variables monthly salary in hundreds of dollars (Y) and years of education (X). Basic labor economics theory tells us, that among many variables, education is an important determinant of wages. In the table given we provide the necessary raw data to estimate the quantitative impact of education on wages. Carry out the following regression analysis: Obs Y 1 4.4567 5.77 5.9787 7.3317 7.3182 6.5844 7.8182 7.8351 11.0223 3 4 9. 5 10 11 12 8 13 14 10 10.6738 15 10.8361 13.615 13.531 11 16 17 18 12 13 Sum 112.7712 156 Calculate the following: a. B, and B. Interpret each coefficient. b. Covariance between X and Y. c. The correlation coefficient.
MATLAB: An Introduction with Applications
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Transcribed Image Text:QUESTION 5
Consider the variables monthly salary in hundreds of dollars (Y) and years of education (X).
Basic labor economics theory tells us, that among many variables, education is an important
determinant of wages. In the table given we provide the necessary raw data to estimate the
quantitative impact of education on wages. Carry out the following regression analysis:
Obs
Y
1
2
4.4567
5.77
5.9787
7.3317
7.3182
6.5844
7.8182
7.8351
11.0223
10.6738
10.8361
13.615
13.531
7
4
5
10
11
12
13
14
7
8
10
15
16
17
18
11
12
13
Sum
112.7712
156
Calculate the following:
a. Bo and B1.
Interpret each coefficient.
b. Covariance between X and Y.
c. The correlation coefficient.
d. Interpret the correlation coefficient.
e. The coefficient of determination.
f. Interpret the coefficient of determination.
g. Predict the monthly salary of a labourer with 20 years of education and interpret your
answer.
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