A manufacturing manager uses a dexterity test on 120 current employees in order to predict watch production based on time to completion (in seconds) and a Male dummy variable. A portion of the data is shown in the accompanying table. 

a. Estimate the linear model Watches = β₀ + β₁Time + β₂Male + ɛ. Interpret the slope coefficient for Time. If the time required to complete the dexterity test is 550 seconds, what is the predicted watch production for male and female employees? 

b. Estimate the logarithmic model Watches = β₀ + β₁ln(Time) + β₂Male + ɛ. Interpret the slope coefficient for ln(Time).If the time required to complete the dexterity test is 550 seconds, what is the predicted watch production for male and female employees? 

c. Which model provides a better fit? Explain.

Transcribed Image Text:

Watches 28 33 THE 24 Time 503 534 ⠀ 518 Male 1 1 ⠀ 1