A social scientist would like to analyze the relationshipbetween educational attainment (in years of higher education) andannual salary (in $1,000s). He collects data on 20 individuals. Aportion of the data is as follows:
| Salary | Education |
| 34 | 1 |
| 52 | 4 |
| 83 | 2 |
| 56 | 5 |
| 75 | 1 |
| 60 | 3 |
| 121 | 7 |
| 52 | 0 |
| 30 | 2 |
| 43 | 3 |
| 93 | 5 |
| 50 | 6 |
| 60 | 7 |
| 58 | 8 |
| 147 | 10 |
| 56 | 0 |
| 81 | 2 |
| 74 | 6 |
| 136 | 5 |
| 25 | 0 |
a. Find the sample regression equation for themodel: Salary = β0 +β1Education + ε. (Roundanswers to 2 decimal places.)
Salary^=Ă‚Â Ă‚Â Ă‚Â Ă‚Â +Ă‚Â Ă‚Â Ă‚Â Education
b. Interpret the coefficient for Education.
As Education increases by 1 unit, an individual’s annual salaryis predicted to increase by $6,530.
As Education increases by 1 unit, an individual’s annual salaryis predicted to decrease by $6,530.
As Education increases by 1 unit, an individual’s annual salaryis predicted to increase by $8,590.
As Education increases by 1 unit, an individual’s annual salaryis predicted to decrease by $8,590.
c. What is the predicted salary for anindividual who completed 7 years of higher education?(Round coefficient estimates to at least 4 decimal placesand final answer to the nearest whole number.)
Salaryˆ= $
