A researcher has estimated the relationship between salaries of 100 selected employees of an organization (shown as "EARN" in $/hour) and their years of education (shown as "YRSEDUC", in years) as per the following regression outcome with 5% level of significance (numbers are made up):

Model 1: OLS, using observations 1-100
Dependent variable: EARN

coefficient std. error t-ratio p-value
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const 3.32418 1.00223 3.317 0.0009 ***
YRSEDUC 0.451931 0.0335255 13.48 5.73e-041 ***

Mean dependent var 16.77115 S.D. dependent var 8.758696
Sum squared resid 598935.5 S.E. of regression 8.661234
R-squared 0.022254 Adjusted R-squared 0.022131
F(1, 7984) 181.7164 P-value(F) 5.73e-41
Log-likelihood −28571.28 Akaike criterion 57146.55
Schwarz criterion 57160.52 Hannan-Quinn 57151.33

Use the above findings to answer the following questions:

A- Given the above estimated outcome, test to verify if the regression intercept is significant. Use a two-sided p-value statistical approach, and show all the required steps.

B- What happens to your finding in part A above, if the level of significant is decreased to 1%?

Answer rating: 100% (QA)

a We have to test to verify if the regression intercept is significant Consider the ... View the full answer