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From a sample of 209 firms, Wooldridge obtained the following regression results* :
Where salary = salary of CEO
Sales = annual firm
Sales roe = return on equity in percent
Ros = return on firm's stock and where figures in the parentheses are the estimated standard errors.
a. Interpret the preceding regression taking into account any prior expectations that you may have about the signs of the various coefficients.
b. Which of the coefficients are individually statistically significant at the 5 percent level?
c. What is the overall significance of the regression? Which test do you use? And why?
d. Can you interpret the coefficients of roe and ros as elasticity coefficients? Why or why not?
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