Question: A social historian is interested in the relationship between education (measured in years of formal schooling) (X) and income (Y). Data from nine individuals were collected and is shown below.

(Use SPSS to do a, b, and c. Do d-k by hand.)

Subject Education (X) Income (in $1,000)

1 4 6

2 6 12

3 8 14

4 11 10

5 12 17

6 14 16

7 16 13

8 17 16

9 20 19

(a). Determine the average number of years of formal school and the mean income for this sample.

(b). Determine the variance in education and income.

(c). Compute the correlation between education and income.

(d). Using information you obtained in (a), (b), and (c) above, determine the regression equation for predicting income from years of formal education.

(e). Predict the income level for a person with 13 years of education.

(f). Draw the regression line on the scatterplot.

(g). Compute the standard error of estimate.

(h). If a person has 16 years of education, what is the probability tha he/she will have an income greater

than $20,000?

(i). Develop the CI95 for the predicted income, given 16 years of education.

(j). Test the hypothesis that Ho: B = 0 (Beta equals zero)

(k). Write a brief report of your interpretation of your analysis.