A researcher wants to study factors that influence salaries at a large bank. Prior to deciding on
Question:
A researcher wants to study factors that influence salaries at a large bank. Prior to deciding on the specification for the regression model, the researcher creates a histogram of the dependent variable, salary. Based on the histogram in the data file below, what should the researcher do?
Years1 Years2 Age Gender PC Job Salary 3 1 26 Male No $32,000 14 1 38 Female No $39,100 12 0 35 Female No $33,200 8 7 40 Female No $30,600 3 0 28 Male No $29,000 3 0 24 Female No $30,500 4 0 27 Female No $30,000 8 2 33 Male No $27,000 4 0 62 Female No $34,000 9 0 31 Female No $29,500 9 2 34 Female No $26,800 8 8 37 Female No $31,300 9 0 37 Female No $31,200 10 6 58 Female No $34,700 4 0 33 Female No $30,000 3 0 27 Female No $31,000 6 0 30 Female No $27,000 8 9 37 Female No $29,600 5 6 44 Female No $32,600 4 3 29 Female No $29,600 4 2 36 Female No $29,500 3 3 28 Male No $31,000 5 0 45 Female No $28,500 3 4 33 Male No $26,700 3 1 24 Male No $30,750 3 1 27 Male No $29,500 16 6 60 Female No $42,200 13 0 48 Female No $37,600 12 6 40 Female No $34,000 4 7 33 Female No $33,000 7 4 35 Female No $28,760 11 0 44 Female No $35,400 3 8 43 Male No $31,000 18 2 46 Female No $38,800 14 0 42 Female No $34,300 19 0 47 Female No $35,000 3 2 25 Female Yes $34,600 2 4 30 Female No $28,500 11 0 40 Female No $29,500 3 2 26 Male No $30,500 5 1 32 Female No $34,200 15 0 51 Female No $43,600 7 0 35 Female Yes $33,500 12 1 37 Female No $33,000 18 0 44 Female No $45,300 17 3 53 Male No $38,800 10 0 40 Female No $29,900 5 10 51 Male No $31,200 15 0 42 Female No $34,000 2 0 53 Female No $30,450 3 3 58 Male No $35,500 4 10 44 Female Yes $34,000 7 0 31 Female No $29,100 8 0 64 Female No $29,650 15 1 47 Female No $29,200 9 0 37 Female Yes $29,800 16 0 46 Female No $33,500 8 0 55 Female No $34,000 9 0 39 Female No $29,600 18 0 51 Female No $34,000 3 8 37 Female No $37,250 6 3 30 Male No $33,000 4 0 26 Female No $28,600 5 1 41 Female Yes $36,000 4 4 34 Female Yes $37,300 7 4 57 Male No $29,900 11 8 53 Female No $31,500 5 4 32 Female Yes $41,400 17 5 44 Female No $32,740 3 1 25 Male No $33,500 5 9 31 Female No $32,000 9 0 50 Female No $30,800 3 3 47 Female Yes $42,000 4 0 35 Male No $34,000 16 0 43 Female No $32,500 9 10 46 Female No $31,700 3 0 35 Male No $36,500 4 0 22 Male No $33,000 8 0 58 Female No $31,200 8 0 40 Female No $34,000 6 0 30 Female No $33,000 4 4 29 Female No $33,900 3 9 31 Female Yes $39,000 12 18 52 Male No $34,920 3 5 33 Male No $39,000 8 0 49 Female No $34,000 6 7 34 Female No $31,900 3 1 26 Male No $37,000 4 0 28 Male No $34,000 3 2 35 Female No $36,400 15 1 47 Female Yes $38,200 15 0 51 Female No $35,300 3 2 26 Male No $34,500 12 0 33 Female No $30,500 2 2 27 Male No $30,000 8 0 34 Female Yes $37,300 5 0 29 Female No $40,200 5 0 27 Male No $35,500 11 0 43 Female No $35,000 4 3 36 Female No $38,000 9 0 38 Female No $35,300 14 0 60 Female No $34,100 4 5 43 Female Yes $43,200 15 5 48 Female No $36,100 7 3 32 Female No $34,600 5 0 31 Male No $36,000 7 2 29 Female No $36,200 7 0 35 Female No $37,500 4 12 37 Female No $41,000 10 0 43 Female No $35,600 5 5 33 Female No $39,800 11 4 58 Female Yes $41,300 9 7 44 Female No $42,500 4 8 37 Female Yes $45,800 5 6 48 Female No $34,900 4 0 26 Male No $41,500 5 0 25 Female No $38,000 6 0 38 Female No $35,000 6 0 41 Female No $40,000 5 0 29 Male No $36,000 9 0 59 Female No $33,700 5 4 29 Male No $36,300 3 2 27 Female Yes $38,000 4 0 30 Female No $39,500 7 5 34 Female No $36,300 8 2 35 Female No $32,500 12 6 50 Female No $37,000 3 1 33 Female No $32,600 4 0 26 Female No $36,000 3 0 36 Female No $35,000 3 5 33 Female Yes $43,600 8 0 47 Female No $33,800 21 0 51 Female No $35,300 16 6 42 Female No $42,400 5 0 31 Male No $39,500 25 10 62 Female No $43,500 6 1 46 Male No $42,000 21 9 60 Female No $40,300 6 5 43 Male No $44,000 25 2 53 Female No $40,660 13 1 38 Female No $39,700 6 5 39 Female No $45,000 7 0 35 Female No $43,900 8 3 40 Female No $38,000 5 3 32 Female No $39,020 5 3 33 Male No $44,500 4 1 30 Male No $41,000 6 3 37 Male No $44,000 6 0 30 Male No $44,000 5 4 32 Female No $42,500 7 3 37 Female No $40,260 5 1 29 Male No $44,500 13 9 50 Female No $35,500 6 0 29 Male No $42,500 7 0 32 Female No $44,000 6 2 31 Male No $45,000 15 4 47 Female No $44,400 17 0 44 Female No $38,000 4 0 27 Male No $41,800 23 0 55 Male No $45,500 5 4 52 Male No $42,500 3 12 50 Female No $44,000 19 8 59 Female Yes $54,300 26 0 47 Female No $44,800 6 4 43 Male No $47,000 15 0 41 Female No $43,800 12 4 39 Female Yes $48,000 9 0 39 Female No $42,700 14 1 40 Female Yes $48,500 16 0 49 Female No $42,000 16 1 53 Female No $45,500 11 0 37 Female No $44,500 13 2 40 Female No $51,200 7 0 34 Male No $47,500 8 0 37 Female No $44,500 8 0 31 Male No $47,000 6 10 41 Male No $47,000 17 4 46 Female No $43,100 8 2 37 Male No $49,000 8 0 33 Male No $48,500 8 5 35 Female No $45,000 16 5 49 Female No $52,500 6 2 33 Male No $47,500 7 0 31 Male No $48,000 8 4 49 Male No $46,500 12 2 40 Female No $61,500 9 2 37 Female No $50,000 12 2 46 Female No $61,800 16 0 43 Female No $43,000 11 1 36 Male No $47,000 9 6 37 Female No $58,500 16 7 40 Male No $55,000 24 3 54 Male No $57,000 17 1 57 Male No $57,000 14 0 49 Male No $60,000 13 0 41 Male No $60,000 19 4 59 Male No $59,000 12 0 51 Male No $60,000 20 0 45 Male No $65,000 20 1 56 Male No $52,000 22 0 57 Male No $58,000 21 0 53 Male No $60,000 39 0 65 Male No $74,000 34 0 60 Male No $95,000 36 0 61 Male No $97,000 32 0 62 Male No $88,000 35 0 59 Male No $94,000 33 0 62 Female No $30,000
a. | Since the histogram suggests that the salary variable is skewed, the researcher should use the natural log of salary as the dependent variable. |
b | The researcher should use the salary variable as given. |
c | The researcher should include a squared term to account for the nonlinearity. |
d | The researcher should use a trend term. |