In a regression of average wages (W) on the number of employees (N) for a random sample

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In a regression of average wages (W) on the number of employees (N) for a random sample of 30 firms, the following regression results were obtained
In a regression of average wages (W) on the number

a. How would you interpret the two regressions?
b. What is the author assuming in going from Eq. (1) to (2)? Was he worried about heteroscedasticity?
c. Can you relate the slopes and the intercepts of the two models?
d. Can you compare the R2 values of the two models? Why or why not?

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Related Book For  answer-question

Essentials of Econometrics

ISBN: 978-0073375847

4th edition

Authors: Damodar Gujarati, Dawn Porter

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