The following table lists a portion of Major League Baseball’s (MLB’s) leading pitchers, each pitcher’s salary (In $ millions), and earned run average (ERA) for 2008.

a. Estimate the model: Salary = β₀ + β₁ERA + ε and interpret the coefficient of ERA.

b. Use the estimated model to predict the salary for each player, given his ERA. For example, use the sample regression equation to predict the salary for J. Santana with ERA = 2.53.

c. Derive the corresponding residuals and explain why the residuals might be so high.

Transcribed Image Text:

ERA Salary 2.53 J. Santana 17.0 C. Lee 4.0 2.54 C. Hamels 0.5 3.09