Step by Step Solutions

Solution: It is believed that the average number of hours spent studying per day (HOURS) during undergraduate education should have a positive linear relationship

Question: It is believed that the average number of hours spent studying per day (HOURS) during undergraduate education should have a positive linear relationship with starting salary (SALARY, measured in thousands of dollars per month) after graduation. Given below is the Excel output from regressing starting salary on number of hours spent studying per day for a sample of 51 students.

Regression Statistics
Multiple R 0.8857
R Square 0.7845
Adjusted R Square 0.7801
Standard Error 1.3704
Observations 51
ANOVA
Df SS MS F
Regression 1 335.0472 335.0473 178.3859
Residual 49 92.0326 1.8782
Total 50 427.0798
Coefficients Standard Error t Stat p-value Lower 95% Upper 95%
Intercept -1.8940 0.4018 -4.7134 2.051E-05 -2.7015 -1.0865
HOURS 0.9795 0.0733 13.3561 5.944E-18 0.8321 1.1269
  1. State the regression equation.
  2. Interpret the meaning of b 0 and b 1 in this problem.
  3. What is the predicted value of starting salary when the average number of hours spent studying per day is 5?
  4. At the 0.05 level of significance, is there evidence of a positive linear relationship between the average number of hours spent studying per day and the starting salary?
  5. Construct a 95% confidence interval estimate of the population slope β 1 . Interpret the confidence interval estimate.
  6. How useful do you think this regression model is for predicting the starting salaries?

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Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document


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