Problem 1 when asked to write a regression model a few

Reference no: EM13375907

Problem 1: When asked to write a regression model, a few past students have written the model as follows:

1367_write a regression model.png

Explain what is wrong with this formulation.

Problem 2: Consider the regression model: 2455_write a regression model1.png where E is the starting salary (in dollars) of a new employee of a firm and N is the number of years of college attended. There are 50 new employees.

a. What are the intuitive/economic interpretations of β0 and β1 ?

b. What are the properties of the least squares estimators (β0 and β1) ?

c. Suppose E is measured in hundreds of dollars. Describe the effect of this change in units on the estimated regression coefficients and their standard errors, t and F-statistics, p-values, and the value of R².

Reference no: EM13375907

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