Question

Using only the Native Americans in the GSS 2008, we run regressions to see whether education affects income, and we do so for men and women. The r2 for men is 0.28 and the r2 for women is 0.03. What does this difference in r2 mean? Interpret it in “layman’s terms.”

Answer 1

For any regression line of y on x, R² shows the extent of linear relationship between y and x. More the value of R² means the linear relationship between y and x is stronger. R² lies between 0 and 1.

Here two different regression lines have been formulated for men and women.

For men, the value of R² is .28 which is more than that for women which is .03.

For men, the value of R² is much larger than the value for women. This means that the linear relationship between education and income is stronger than that for women. This shows that for men, education affects income more strongly than that it does for women. This is what the difference of the values depict.

Hope the solution helps. Thank you.