Practice Exercise 5.3

Practice exercise 5.3. We are going to utilize data set two from Appendix B and perform a simple linear regression. We go to Analyze Regression. Linear. Our dependent variable is what we would like to predict. In this case, it’s salary. The independent variables are what we would like to predict it from. In this case, years of education. We’re going to use that. Leave everything else the same with method Enter. I’m going to click Okay. So we get the output member that regression equations take the form of the predicted value is equal to the beta weight of the constant plus the beta weight times each of the variables used. So the answers are down in this coefficient section in this capital B column. And this particular instance. Our equation becomes predictive Salary. Salary prime is equal to negative 18,970.501 plus years of education times 3,699.115. In this particular exercise, we are asked to predict for someone with 12 years of education. So we are going to solve that equation. Substituting in a 12 for the years of education. Solving that gives us an answer of $25,418.88. The question also asks what we would predict for someone with a college education. In this case, we simply substitute a 16 in where we previously had substituted a 12 for education. Which means we put in negative 18,970.501. But now we add 16 times the $3,699.16. It gives us an answer of $40,215 and 34 cents for someone with a college education.