As an attempt to explain the salaries of executives (SAL), an analyst collects data from a...

 

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As an attempt to explain the salaries of executives (SAL), an analyst collects data from a sample of 500 executives and regresses the natural log of salary (LSAL) on the natural log of age (LAGE), the natural log of the number of years of work experiences (LEXP), and the natural log of the number of years of education (LEDU), obtaining the following: LSAL = 20.33 + 0.50LAGE+ 0.67LEXP + 1.20LEDU (12.40) (0.33) (1.21) (0.92) R-squared= .88 Note: t-ratios are in parentheses. A. What is the value of the standard error associated with the coefficient of LAGE? B. With SAL on the vertical axis and number of years of education on the horizontal axis, based on the results sketch a curve relating these two variables. What does the curve say about the impact of education on salary? C. Based on the above results, all else equal, what percentage change in an executive's age would lead to a doubling of their salary? As an attempt to explain the salaries of executives (SAL), an analyst collects data from a sample of 500 executives and regresses the natural log of salary (LSAL) on the natural log of age (LAGE), the natural log of the number of years of work experiences (LEXP), and the natural log of the number of years of education (LEDU), obtaining the following: LSAL = 20.33 + 0.50LAGE+ 0.67LEXP + 1.20LEDU (12.40) (0.33) (1.21) (0.92) R-squared= .88 Note: t-ratios are in parentheses. A. What is the value of the standard error associated with the coefficient of LAGE? B. With SAL on the vertical axis and number of years of education on the horizontal axis, based on the results sketch a curve relating these two variables. What does the curve say about the impact of education on salary? C. Based on the above results, all else equal, what percentage change in an executive's age would lead to a doubling of their salary?

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A The standard error associated with the coefficient of LAGE is 033 which can be calculated as follo... View the full answer