Regression with Dummy Variables Using the data in the Excel spreadsheet, complet
ID: 3234904 • Letter: R
Question
Regression with Dummy Variables
Using the data in the Excel spreadsheet, complete a multiple linear regression. Use wage as the dependent variable, and the remaining variables as independent variables. Please note that wage variable has been standardized using a log conversion. This will not negatively affect your analysis.
How many independent variables are there in your model: __________________
Which independent variable has the highest t-Stat? ______________________
Which independent variable(s) has / have a negative t-Stat? ________________
Is the coefficient for the variable Female positive or negative? ______________
What does this imply about female’s wages (compared to a male’s wages)? ____________________________________________________________________________________________________________________________
Data Source: https://docs.google.com/spreadsheets/d/14qSFRrhs83YlRcuMwIyZH727cg7ehlx39GNufE6DdMk/edit?usp=sharing
Explanation / Answer
The regression statistics are
Independent variable in this model = 4
Which independent variable has the highest T - stat = Education is the highest t- stat
Which independent variable(s) has / have a negative t-Stat? Female only has the negative t - stat
Is the coefficient for the variable Female positive or negative? negative
What does this imply about female’s wages (compared to a male’s wages)?
That means being female will provide less wages than being a male when they are at equal level of age, education and belong to Union or not.
SUMMARY OUTPUT Regression Statistics Multiple R 0.38168195 R Square 0.14568111 Adjusted R Square 0.14528101 Standard Error 6.75028883 Observations 8546 ANOVA df SS MS F Significance F Regression 4 66364.629 16591.16 364.1095 6E-290 Residual 8541 389182.62 45.5664 Total 8545 455547.24 Coefficients Standard Error t Stat P-value Lower 95% Intercept -5.18552564 0.5336243 -9.71756 3.31E-22 -6.23156 Age 0.113551 0.0061367 18.50364 5.57E-75 0.101522 Union 2.88365952 0.2040948 14.12902 8.03E-45 2.483584 Education 0.93014839 0.038982 23.86098 7.1E-122 0.853734 Female -2.06670332 0.1485907 -13.9087 1.67E-43 -2.35798