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Bus 173 Report - Project Work Bus 173 Report - Project Work

This document contains the solutions to 6 questions regarding a multiple regression analysis project. The project examines the effect of education, gender, and minority classification on employee starting salary. It presents the estimated regression equation and interprets the coefficient values. It also provides predictions from the model, analyzes the standard error and coefficient of determination, and calculates 95% confidence intervals for the coefficient estimates.

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330 views7 pages

Bus 173 Report - Project Work Bus 173 Report - Project Work

This document contains the solutions to 6 questions regarding a multiple regression analysis project. The project examines the effect of education, gender, and minority classification on employee starting salary. It presents the estimated regression equation and interprets the coefficient values. It also provides predictions from the model, analyzes the standard error and coefficient of determination, and calculates 95% confidence intervals for the coefficient estimates.

Uploaded by

Nahian Sattar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Bus 173 report - Project work

Finance (North South University)

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Course: Applied Statistics (BUS 173)


Section: 10
Semester: Spring-2017
Date of Submission: 21st April, 2017

Prepared for:
Dr. Jamil Hasan Karami (JHK)
Department of Management
North South University

Prepared By:
Hasan Ahmed Shovon ID: 1532431857

Introduction: A simple regression model includes one independent and one dependent variable.
But usually a dependent variable is affected by more than one independent variable. So when a
regression model that includes two or more independent variables it will call a multiple

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regression model. Our project is about to examine the effect of education, gender and minority
classification on the beginning salary of the employees in a company. Here education, gender
and minority classification are independent variable and beginning salary is the dependent
variable. As there is more than one independent variables in this project, we will use multiple
regression model for the project.

Solution of the Question Number: 02

Let

y= Beginning Salary (Dependent Variable)

x 1= Education Level (Independent Variable)

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x 2 = Gender (Independent Variable)

x 3 = Minority Classification (Independent Variable)

We are to estimate the regression model-

y = A + B1 x 1 + B2 x 2 + B3 x 3 + ϵ

From the output given in SPSS software the estimated regression equation is-

^y = 243.921 + 521.819 x 1 – 1158.897 x 2 – 853.319 x 3

Solution of the Question Number: 03

From the solution of question number 02, the estimated regression equation is-

^y = 243.921 + 521.819 x 1 – 1158.897 x 2 – 853.319 x 3

From this equation,

b1 = 521.819, b2 = -1158.897, b3 = -853.319

The value of b1 = 521.819 in the estimated regression model gives the change in ^y for a one unit
change in x 1 when x 2 and x 3 are held constant. Thus we can state that an employee with one extra
year of education without considering gender and minority classification is expected to get $522
more beginning salary per month.

The value of b2 = -1158.897 in the estimated regression model gives the change in ^y for a one
unit change in x 2 when x 1 and x 3 are held constant. Thus, a female employee is expected to get
$1159 less than a male employee beginning salary per month.

The value of b3 = -853.319 in the estimated regression model means a non white employee is
expected to get $853 less beginning salary than a white employee when x 1 and x 2 are held
constant.

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Solution of the Question Number: 04

From output of SPSS,

Standard Deviation of Errors, Se = 1958.140

Coefficient of multiple determination, R2 = 45.2%

Interpretation:

Standard Deviation of Errors, Se = 1958.140 tells us that the average difference of the sample
mean from the population mean is about 1958.140.

The value of R2 = 45.2% state that 45.2% of total variation in beginning salary is explained by
education, gender and minority classification and 54.8% variation depends on other factors.

Solution of the Question Number: 05

x 1=17 years, x 2= 0 (Male), x 3=0 (White)

Now we have to put these values in the estimated regression model. Thus,

^y = 243.921 + (521.819*17) – (1158.897*0) – (853.319*0)

=9114.844

So, we can predict that the beginning salary for the employee who is white male and has 17 years
of education will be $9114.844.

Solution of the Question Number: 06

From output of SPSS,

b1 = 521.819 and Sb1 = 79.573


b2 = -1158.897 and Sb2 = 437.871
b3 = -853.319 and Sb3 = 548.171

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The confidence level = 95%

95% Confidence Interval for B1:

The 95% confidence interval for B1 is,

(b1 ± t*Sb1) =521.819 ± 1.985* 79.573

= 521.819 ± 157.952

= 363.868 to 679.770

We can state with 95% confidence that for one extra year of education, the beginning salary
changes by an amount between $363.868 to 679.770.

95% Confidence Interval for B2:

The 95% confidence interval for B2 is,

(b2 ± t*Sb2) = -1158.897 ± 1.985*437.871


= -1158.897 ± 869.174

= -2028.064 to -289.730

We can state with 95% confidence that for a change in gender of employee, the beginning salary
changes by an amount between $-2028.064 to -289.730.

95% Confidence Interval for B3:

The 95% confidence interval for B3 is,

(b3 ± t*Sb3) = -853.319 ± 1.985*548.171


= -853.319 ± 1088.119

= -1941.431 to 234.793

We can state with 95% confidence that for a change in minority classification, the beginning
salary changes by an amount between $-1941.431 to 234.793.

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