Question

Mike Jimenesz is president of the teachers' union for preston school district. in preparing for upcoming negotiations, he would like to investigate the salary structure of the classroom teachers in the district. He believes there are three factors that affect a teacher's salary: Years of Experience, Rating of teaching effectiveness given by the principal, and whether the teacher has a master's degree. A random sample of 20 teachers resulted in the following data.

Salary	Years of experience	Principal’s Rating	Master’s Degree
($ thousands)
52.1	8	35	1
43.6	5	43	0
40.3	2	51	0
53	13	60	1
51.6	12	73	1
57	14	80	1
52	9	76	1
46.8	7	54	0
58.6	19	55	1
42.8	3	90	0
36.7	1	30	0
40.6	5	44	0
61.8	23	84	1
54.7	17	76	1
48.4	12	68	0
53.6	14	25	1
51.8	8	90	1
47.7	4	62	0
42.8	1	80	0
53.8	8	72	1
			*1 = yes, 0 = no

A) What is the question being asked?

B) Label your dependent variable:

C) Label all of the independent variables

D) Develop a correlation matrix. Which independent variable has the strongest correlation with the dependent variable? State the variable and the correlation coefficient.

E) Determine the regression equation

F) What is the estimated salary for a teacher with 5 years experience, a rating of 60, and no masters degree?

Run Diagnosis to see if the model is significant at Alpha= .05

G) State the null and alternate hypothesis

H) Compute the value of the test statistic

I) Compute the P-Value

J) What is your decision regarding the null hypothesis? Interpret the result.

K) Run a diagnosis to determine if the slope of the individual variables are significant at Alpha=.05

J) Is Multicollinearity a problem? Compute the VIF for each independent variable.

K) Overall conclusions:

Answer 1