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Question: We collected data on a sample of 99 employees in an electricity company.
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i don't know how to do, please help me to do it.<br/><br/><br/>Question:<br/>We

collected data on a sample of 99 employees in an electricity company. We want to investigate the factors that affect the hourly wage of employees. The scatter plot below shows the relationship between hourly wages ($) and education (number of years of education). In the plot, we also provide a trendline (red dashed line) with the corresponding R-square value of 0.2745 to display the relationship between these two variables





a. State and interpret the correlation coefficient. Do you think the interpretation is reasonable? Explain why or why not.


b. If John has 15 years of education and we calculate his expected hourly wage using the trend line model, is the prediction valid? Briefly explain your answer. 


We apply a linear model and add another explanatory variable; the number of years of work experience (referred to as experience in the regression output below).



c. Test if education has a positive effect on hourly wages. Show all five steps and use a 5% level of significance. You are required to use the p-value approach.


d. Based on your answer above, interpret a Type II error in context of the question.

微信图片_20200622093808.png
微信图片_20200622093821.png
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.636259
R Square
0.404825
Adjusted R Square
0.392426
Standard Error
4.555308
Observations
99
ANOVA
Significance
df
SS
MS
F
F
Regression
2
1354.96955
677.4848
32.648559 1.52385E-11
Residual
96
1992.07992
20.75083
Total
98
3347.04948
Standard
Coefficients
Error
t Stat
P-value
Lower 95%
Upper 95%
Intercept
-13.960625
2.780843 -5.020285
0.000002
-19.48056
-8.440695
Education
1.564154
0.197033
7.938537
0.000000
1.17305
1.955262
Experience
0.137957
0.040057
3.443992
0.000851
0.05844
0.217470

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