Question

Using data from 50 workers, a researcher estimates Wage = β₀ + β₁ Education + β₂Experience +β₃Age + ε, where Wage is the hourly wage rate and Education, Experience, and Age are the years of higher education, the years of experience, and the age of the worker, respectively. A portion of the regression results is shown in the following table.

	Coefficients	Standard Error	t Stat	p-Value
Intercept	7.42	4.14	1.79	0.0797
Education	1.53	0.39	3.92	0.0003
Experience	0.47	0.20	2.35	0.0231
Age	−0.07	0.08	−0.88	0.3861

a-1.

Interpret the point estimate for β₁.

	As Education increases by 1 unit, Wage is predicted to increase by 1.53 units, holding Age and Experience constant.
	As Education increases by 1 unit, Wage is predicted to increase by 1.53 units.
	As Education increases by 1 unit, Wage is predicted to increase by 0.47 units.
	As Education increases by 1 unit, Wage is predicted to increase by 0.47 units, holding Age and Experience constant.

a-2.

Interpret the point estimate for β₂.

	As Experience increases by 1 unit, Wage is predicted to increase by 1.53 units.
	As Experience increases by 1 unit, Wage is predicted to increase by 0.47 units.
	As Experience increases by 1 unit, Wage is predicted to increase by 1.53 units, holding Age and Education constant.
	As Experience increases by 1 unit, Wage is predicted to increase by 0.47 units, holding Age and Education constant.

b.	What is the sample regression equation? (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)

  yˆ=y^=  +  Education +  Experience +  Age

c.	Predict the hourly wage rate for a 40-year-old worker with 4 years of higher education and 3 years of experience. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

yˆy^

Answer 1