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A researcher has designed the relationship between the salaries of selected employees of an organization (shown as "EARN" in $/hour) and their years of education (shown as "YRSEDUC", in years) and their age (shown as "AGE" in years). The estimated GRETL outcome is shown as hereunder (numbers are made up):

Model 1: OLS, using observations 1-322

Dependent variable: EARN

Coefficient std. error t-ratio p-value

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Const 12.40443 1.862341 43.854 4.06e-06 ***

YRSEDUC 5.32901 0.195032 1.032 4.62e-033 ***

AGE 1.29003 1.002893 7.281 7.59e-040 ***

Mean dependent var 10.27310 S.D. dependent var 4.758696

Sum squared resid 588266.3 S.E. of regression 8.584281

R-squared 0.289671 Adjusted R-squared 0.289430

The correlation matrix between variables YRSEDUC and AGE are shown as hereunder:

Correlation coefficients, using the observations 1 - 322

5% critical value (two-tailed) = 0.0680 for n = 322

YRSEDUC AGE

1.0000 0.3075 YRSEDUC

1.0000 AGE

Using the above findings, answer the following questions:

A-Is multicollinearity a concern in this analysis? Why? Explain your reasons.

B-Given the above information, under what conditions it will become impossible to obtain the OLS estimates?

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