Question

The following estimated regression model was developed relating yearly income (y in $1000s) of 30 individuals with their age (x₁) and their gender (x₂) (0 if male and 1 if female).

ŷ = 30 + 0.7x₁ + 3x₂

Also provided are SST = 1200 and SSE = 384.

The estimated income of a 30-year-old male is _____.

a. $51

b. $510

c. $5100

d. $51,000

Answer 1

Estimated regression model was developed relating yearly income (y in $1000s) of 30 individuals with their age (x1) and their gender (x2) (0 if male and 1 if female).

= 30+0.7x1+3x2

: Estimated income in($1000s)

Estimated income of a 30-year-old male

x1 : age = 30 ; Gender : male : x2=0

= 30+0.7x1+3x2 = 30 + 0.7 * 30 + 3*0 = 30+2.1 =5.1

: Estimated income in($1000s) = 5.1

Estimated income = 5.1 * $1000 = $5100

The estimated income of a 30-year-old male is _____.

c. $5100