The following is the regression for Exercise 3 with an indicator variable:

R-squared = 0.3988, Adjusted R-squared: 0.3623 SE = 251.8474 with 36 observations Variable Coefficient SE(Coeff) t-ratio P-value Intercept 1442.1552 182.4474 7.9045 0.0000 Gender -226.3788 87.7915 -2.5786 0.0146 Savings 0.0119 0.0026 4.4871 0.0001

a) Write out the regression model.

b) In this regression, the variable Gender is an indicator variable that is 1 for retired male. How would you interpret the coefficient of Male?

c) What null hypothesis can we test with the t-ratio for Male?

d) Can you reject the null hypothesis of part c? Explain.

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2900 2700 2500 2300 2100 1900 1700 Expenses Expenses vs. Savings 1500 48000 58000 68000 78000 88000 98000 108000 Savings ($)