Suppose the manager of HRD would like to examine the relationship between increment in the salary (Y) BDT and years of experience(X1)among the employees with different job categories (X2) such as clerical, custodial, and managerial. The data on 56 employees on these variables were obtained. Two dummy variables were created for the categorical independent variable X, as D2=1 if he/she is doing the custodial job and 0 for otherwise and D2=1 if s/he is doing the managerial job and 0 for otherwise. The least-squares estimate is given below: 

(a) Is there any difference in increment for two employees with the same years of experience one who is doing Custodial and the other who is doing the managerial job? Give reasoning of your answer. 

(b) Test whether the experience has a positive effect on-increment or not at a 2.5% level of significance.

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Y = 120 + 10.3X1 + 20.8D1 + 32.4D2 with SE(B) = 0.876; SE() = 3.26 SE(B) = 3.87 and SST=12036, SSE=3050 %3D %3D Y = 120 + 10.3X1 + 20.8D1 + 32.4D2 with SE(B) = 0.876; SE() = 3.26 SE(B) = 3.87 and SST=12036, SSE=3050 %3D %3D

Answer rating: 100% (QA)

a Predicted salary for a person who is doing managerial job Here X 1 0 D 1 0 and D 2 1 The pre... View the full answer