Question: The salaries of the Principals of Scottish Higher Education Institutions have been reported in the press from time to time, e.g. in the Scotsman 2 February 1996. The size of each of these institutions can be roughly described by the number of Full Time Equivalent (FTE) Students that it returned to the Scottish Higher Education Funding Council. The institutions fall into 4 categories : 1 - Ancient Universities, 2 - Universities, 3 – Post 1992 Universities, 4 - Other Higher Educational Institutions.

The structure of the file “Question 7 Data” is as shown below.

In addition there are four columns “Type 1”, to “Type 4” which indicate the type of Institution in an alternative way which may be useful for part of the analysis.

Use regression analysis to investigate

(a) Whether the salary of a principal of a Scottish Higher Education Institution depends on the number of student Full Time Equivalents (FTEs) in his Institution, and if so, estimate how much a principal's salary increases with one extra student FTE .

(b) Whether the salary of a principal of a Scottish Higher Education Institution depends on the type of Institution as well as on the number of student FTE and if so, how much is the base line component of a principal's salary ( the component that changes with type of institution) at each category of institution .

(c) Whether the principal's salary at any Institution appears to be an outlier.