Question

# Consider the following estimated regression model relating annual salary to years of education and work experience....

Consider the following estimated regression model relating annual salary to years of education and work experience. Estimated Salary=10,815.11+2563.46(Education)+897.49(Experience) . Suppose two employees at the company have been working there for five years. One has a bachelor's degree (8 years of education) and one has a master's degree (10 years of education). How much more money would we expect the employee with a master's degree to make?

Estimated Salary=10,815.11+2563.46(Education)+897.49(Experience)

For Employee with bachelor's degree, Education = 8

For Employee with master's degree, Education = 10

The difference in education between Employee with master's degree and bachelor's degree = 10 - 8 = 2

Slope of the Education in estimated regression line = 2563.46

So, for same number of years of experience, employee with a master's degree will make 2 * 2563.46 = 5126.92 more than the employee with bachelor's degree.

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