Question

A software firm collected data for a sample of 20

computer programmers. A suggestion was made that

regression analysis could be used to determine if

salary was related to the years of experience and the

score on the firm’s programmer aptitude test.

Use the Regression ToolPak to answer the following questions

a. What is the estimated regression equation?

b. What is the adjusted coefficient of determination? Interpret your findings.

c. Interpret the coefficient for years Experience in context.

d. Predict the salary of programmer who has 4 years of experience and tests score of 91

e. Interpret the standard error of the regression.

Exper (Yrs)	Test Score	Salary ($1000)
4	78	64
7	100	83
1	86	63.7
5	82	74.3
8	86	75.8
10	84	78
0	75	62.2
1	80	63.1
6	83	70
6	91	73
9	88	78
2	73	66.6
10	75	76.2
5	81	71.6
6	74	69
8	87	74
4	79	70.1
6	94	73.9
3	70	68.2
3	89	70

Answer 1

a) Estimated regression equation

Expected salary= 43.17+1.40*Experience+0.25 *Test Scores

b) Adjusted coefficient of determination is 0.8147 .

Interpreation: The adjusted R-squared is a modified version of R-squared that has been adjusted for the number of predictors in the model.

c) Interpretation: For a year experience there will be an increase of 1.43 thousand dollars in salary.

d) For experience= 4 and and test scores= 91

Estimated salary=43.17+1.40*4+0.25*91= 43.17+5.6+22.75= 71.52($1000)

e) standard error of regression: represents the average distance that the observed values fall from the regression line. So for this it is 2.42 which is not too large. It means  that the observations are closer to the fitted line.