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SALARY EDUCAT EXPER MONTHS MALES 3900.00 12.00 0.00 1.00 0 4020.00 10.00 44.00 7.00 0 4290.00 12.00 5.00 30.00 0 4380.00 8.00 6.20 7.00

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SALARY EDUCAT EXPER MONTHS MALES 3900.00 12.00 0.00 1.00 0 4020.00 10.00 44.00 7.00 0 4290.00 12.00 5.00 30.00 0 4380.00 8.00 6.20 7.00 0 4380.00 8.00 7.50 6.00 0 4380.00 12.00 0.00 7.00 0 4380.00 12.00 0.00 10.00 0 4380.00 12.00 4.50 6.00 0 4440.00 15.00 75.00 2.00 0 4500.00 8.00 52.00 3.00 0 4500.00 12.00 8.00 19.00 0 4620.00 12.00 52.00 3.00 0 4800.00 8.00 70.00 20.00 0 4800.00 12.00 6.00 23.00 0 4800.00 12.00 11.00 12.00 0 4800.00 12.00 11.00 17.00 0 4800.00 12.00 63.00 22.00 0 4800.00 12.00 144.00 24.00 0 4800.00 12.00 163.00 12.00 0 4800.00 12.00 228.00 26.00 0 4800.00 12.00 381.00 1.00 0 4800.00 16.00 214.00 15.00 0 4980.00 8.00 318.00 25.00 0 5100.00 8.00 96.00 33.00 0 5100.00 12.00 36.00 15.00 0 5100.00 12.00 59.00 14.00 0 5100.00 15.00 115.00 1.00 0 5100.00 15.00 165.00 4.00 0 5100.00 16.00 123.00 12.00 0 5160.00 12.00 18.00 12.00 0 5220.00 8.00 102.00 29.00 0 5220.00 12.00 127.00 29.00 0 5280.00 8.00 90.00 11.00 0 5280.00 8.00 190.00 1.00 0 5280.00 12.00 107.00 11.00 0 5400.00 8.00 173.00 34.00 0 5400.00 8.00 228.00 33.00 0 5400.00 12.00 26.00 11.00 0 5400.00 12.00 36.00 33.00 0 5400.00 12.00 38.00 22.00 0 5400.00 12.00 82.00 29.00 0 5400.00 12.00 169.00 27.00 0 5400.00 12.00 244.00 1.00 0 5400.00 15.00 24.00 13.00 0 5400.00 15.00 49.00 27.00 0 5400.00 15.00 51.00 21.00 0 5400.00 15.00 122.00 33.00 0 5520.00 12.00 97.00 17.00 0 5520.00 12.00 196.00 32.00 0 5580.00 12.00 132.50 30.00 0 5640.00 12.00 55.00 9.00 0 5700.00 12.00 90.00 23.00 0 5700.00 12.00 116.50 25.00 0 5700.00 15.00 51.00 17.00 0 5700.00 15.00 61.00 11.00 0 5700.00 15.00 241.00 34.00 0 6000.00 12.00 121.00 30.00 0 6000.00 15.00 78.50 13.00 0 6120.00 12.00 208.50 21.00 0 6300.00 12.00 86.50 33.00 0 6300.00 15.00 231.00 15.00 0 4620.00 12.00 11.50 22.00 1 5040.00 15.00 14.00 3.00 1 5100.00 12.00 180.00 15.00 1 5100.00 12.00 315.00 2.00 1 5220.00 12.00 29.00 14.00 1 5400.00 12.00 7.00 21.00 1 5400.00 12.00 38.00 11.00 1 5400.00 12.00 113.00 3.00 1 5400.00 15.00 17.50 8.00 1 5400.00 15.00 359.00 11.00 1 5700.00 15.00 36.00 5.00 1 6000.00 8.00 320.00 21.00 1 6000.00 12.00 24.00 2.00 1 6000.00 12.00 32.00 17.00 1 6000.00 12.00 49.00 8.00 1 6000.00 12.00 56.00 33.00 1 6000.00 12.00 252.00 11.00 1 6000.00 12.00 272.00 19.00 1 6000.00 15.00 25.00 13.00 1 6000.00 15.00 35.50 32.00 1 6000.00 15.00 56.00 12.00 1 6000.00 15.00 64.00 33.00 1 6000.00 15.00 108.00 16.00 1 6000.00 16.00 45.50 3.00 1 6300.00 15.00 72.00 17.00 1 6600.00 15.00 64.00 16.00 1 6600.00 15.00 84.00 33.00 1 6600.00 15.00 215.50 16.00 1 6840.00 15.00 41.50 7.00 1 6900.00 12.00 175.00 10.00 1 6900.00 15.00 132.00 24.00 1 8100.00 16.00 54.50 33.00 1 Employment Discrimination 2: Data are available for a random sample of 93 employees from Harris Bank Chicago. Data available include gross monthly salary (in dollars) (SALARY), employee's education level (in years) (EDUC), previous work experience in the banking industry (in months) (EXPER), seniority* (in months) (MONTHS), which is the number of months after January 1, 1969, that the individual was hired, and employee gender (MALES coded 1 for male, O for female). We are especially concerned with whether there is evidence of gender discrimination with respect to salary at the bank. However, it is important to control for other factors that impact salary such as education level, experience level, and seniority within the company. Therefore, build a regression model to predict gross monthly salary on all four explanatory variables. Use the results to answer the following questions. In addition, suppose that legal counsel representing Harris Bank suggests that an interaction exists between education and experience and that the introduction of this term into the regression may account for the difference in average salaries. Fit the interaction model by regressing y on all four explanatory variables and the interaction variable you will create. Use the results to answer the following questions. (a) State the model equation. SALARY = B + Bx1 + Bx2 SALARY = B + B1 + Bx2 + 33 + Baxa + B5x12 SALARY = B + B1 + Bzxz + B3X3 + Baxa + B5x2x3 SALARY = B + B + Bzxz + B3x3 + 4x4 + Box1x3 SALARY B+ B1 + Bzxz + B3x3 + Baxa (b) What is the adjusted R for the regression with the interaction term? (Enter your answer to two decimal places.) % What is the adjusted R for the regression model without the interaction variable? (Hint: You ran this model in question 1 of this assignment) (Enter your answer to two decimal places.) % Compare these adjusted R values above. Which model appears to be the best choice based on the adjusted R? The interaction model appears superior because adjusted R is higher. The interaction model appears superior because adjusted R is lower. The non-interaction model appears superior because adjusted R is higher. The non-interaction model appears superior because adjusted R is lower. (c) Test to see whether the interaction term is important in this regression model. Use a 5% level of significance. State the hypotheses to be tested. OHi B = 0 Hi P = 0 OHi P = 0 H: P = 0 0 Ho: B2 = 0 Hi P = 0 OH B = 0 H = 0 O Ho B4 = 0 Hi P = 0 Ho B = 0 Interpret the hypotheses you specified above. H: No interaction exists between education and experience that impacts salary. H: An interaction exists between education and experience that impacts salary. H: An interaction exists between education and experience that impacts salary. H: No interaction exists between education and experience that impacts salary. H: None of the explanatory variables in the model are useful in predicting salary. H: All of the explanatory variables in the model are useful in predicting salary. H: None of the explanatory variables in the model are useful in predicting salary. H: At least one of the explanatory variables in the model is useful in predicting salary. H: At least one of the explanatory variables in the model is useful in predicting salary. H: None of the explanatory variables in the model are useful in predicting salary. State the appropriate test statistic name, degrees of freedom, test statistic value, and the associated p-value (Enter your degrees of freedom as a whole number, the test statistic value to three decimal places, and the p-value to four decimal places). ---Select--- State your decision. P --Select- Do not reject the null hypothesis. According to the hypothesis test, the interaction term is important in this regression model. Reject the null hypothesis. According to the hypothesis test, the interaction term is not important in this regression model. Do not reject the null hypothesis. According to the hypothesis test, the interaction term is not important in this regression model. Reject the null hypothesis. According to the hypothesis test, the interaction term is important in this regression model. (d) Summarize your results so far. Adjusted R suggested that the interaction term was important and the hypothesis test definitively showed that it was important. Even though adjusted R suggested that the interaction term was not important, the hypothesis test definitively showed that it was important. Adjusted R suggested that the interaction term was not important and the hypothesis test definitively showed that it was not Activate Windows O Even though adjusted R suggested that the interaction term was important, the hypothesis test definitively showed that it was pettings to activate Windows. For the record, how would you respond to the suggestion that introduction of the interaction term into the regression may account for the difference in average salaries? O The interaction term is not useful in explaining the difference in average salaries. Results are inconclusive with regard to the usefulness of the interaction term in explaining the difference in average salaries. It appears that the interaction term is useful in explaining the difference in average salaries.

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