Question

Suppose the following regression equation was generated from sample data relating salary to years of experience, marital status, and the interaction term of years of experience and marital status. Marital status is a dummy variable where MARRIEDi=1MARRIEDi=1 if employee i is married and MARRIEDi=0MARRIEDi=0 if employee i is single.

SALARYi=58316.795901+790.675473EXPERIENCEi+1222.075701MARRIEDi−36.766201EXPERIENCEiMARRIEDi+ei

1) In this regression equation, what is the intercept value for married employees?

2)In this regression equation, what is the value of the slope for married employees?

Answer 1

For married employees,

The estimated regression equation is :

or,

or,

1) In this regression equation, the intercept value for married employees = 59538.871602

2) In this regression equation, the value of the slope for married employees = 753.909272