Part 1

1.
a.

b.

c.
According to the regression model as beginning salary as the response variable, if the employee is a
minority then the beginning salary will reduce by $2994.1 compared to an employee that categorized as
a non-minority. Also according to the regression line that current salary as the response variable, the
current salary will reduce by $7309.4 for a minority employee, compared to a non-minority employee.
2.
i.

ii.
The order of entry is
type of job, time in the current job, previous experience , education, age and gender.

iii.

iv.

since

since age is not significant, it is discarded from the model.

v.
final equation
salary = 5642.067 - 2083.413 (MinorityYes) + 105.913 (Jobtime) + 5662.793(JobcatCustodial)
+26999.029(JobcatManager) -7.479(Prevexp) + 1397.038(educ) -5693.186(femaledummyTrue)

b.
F statistic = 181.4
R2 value = 0.7316. therefore about 73.16% of the total variability of current salary can be explained
using the fitted regression model.
The p values of the minorityYes, jobtime, jobCustodial,jobcatManage,prevexp and educ are less than the
significant level 0.05.
c.
i. the p value of the F statistic in the final model is less than the significant level, 0.05. So the F statistic is
significant. Hence the overall model is significant. Based on the regression coefficients the current salary

of a minority will reduce by $2083.413 compared to a non-minority when other variables keep
constant.
Also when the job time increase by 1 unit, then the current salary will increase by $105.913. When
consider the job categories, the custodial category have a salary increment of $5662.793 compared to
other categories when the other variables keep constant. Also the salary of an employee who is a
manager is 2699.029$ than the other categories when the other variables keep constant. At the same
time, if the previous experience of an employee increase by 1 unit, then the current salary will decrease
by $7.479 when the other variables keep constant. Also when the education level increases by 1 year,
then the current salary will increase by $1397.038 when the other variables keep constant.
Based on the results, the p values of the minorityYes, jobtime, jobCustodial,jobcatManage,prevexp ,
educ and femaledummyTRUE are less than the significant level 0.05. So those variables are significant to
the model. The p value of prevexp is larger than the 0.1 level. So that variable is not significant at that
level.
3.
a.
According to the results, the if an employee has a job category of manager, then that person will earn
more than the other people. Also when a person have more education interms if years, then they will
earn more. Also based on the minority status, if a person categorized as a minority, then they will earn
$2083.413 less compared to a non- minority employee when the other variables keep constant. Also if
the employee is a female, then the current salary will reduce by $5693.186 compared a male employee
when the other variables keep constant.
b.
yes. Because the salary is $2083.413 less than the non minority workers.
4.
a. t test can only use to compare something withrespect to 2 groups. When there are more than 2
groups, t test cannot be used. Also t test cannot be used to predict the values based on the independent
variables.
b.
multiple regression is a better analysis as it can use to predict the future values using the model. Also it
can used to analyze the effect of a response variable with respect to several independent variables.