Exercise 12-23

Using data from 50 workers, a researcher estimates Wage = ₀+ ₁Education + ₂Experience +₃Age + , where Wage is the hourly wage rate and Education, Experience, and Age are the years of higher education, the years of experience, and the age of the worker, respectively. A portion of the regression results is shown in the following table.

Coefficients Standard Error t stat p-value

Intercept 7.87 4.09 1.93 0.0603

Education 1.44 0.34 4.24 0.0001

Experience 0.45 0.14 3.16 0.0028

Age -0.01 0.08 -0.14 0.8920

a-1.What is the point estimate for ₁?

[ ]1.44

[ ]0.45

choose either answer

a-2.Interpret this value.

[ ]As Education increases by 1 unit, Wage is predicted to increase by 0.45 units, holding Age and Experience constant.

[ ]As Education increases by 1 unit, Wage is predicted to increase by 0.45 units.

[ ]As Education increases by 1 unit, Wage is predicted to increase by 1.44 units.

[ ]As Education increases by 1 unit, Wage is predicted to increase by 1.44 units, holding Age and Experience constant.

choose one

a-3.What is the point estimate for ₂?

[ ]0.45

[ ]1.44

Choose

a-4.Interpret this value.

[ ]As Experience increases by 1 unit, Wage is predicted to increase by 0.45 units, holding Age and Education constant.

[ ]Same interpretation by using 1.44 or -0.01

Choose

b.What is the sample regression equation?(Round your answer to 2 decimal places.)

y-hat =________+_______Education +__________Experience ________Age

c.What is the predicted value for Age = 30, Education = 4 and Experience = 3.(Round your answer to 2 decimal places.)

y-hat= ______________