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The issues regarding executive compensation have received extensive media attention. Consider a regression model that links CEO compensation (in $ millions) with the total assets

The issues regarding executive compensation have received extensive media attention. Consider a regression model that links CEO compensation (in $ millions) with the total assets of the firm (in $ billions) and the firm's industry. Dummy variables are used to represent four industries: Manufacturing Technology d1, Manufacturing Other d2, Financial Services d3, and Nonfinancial Services d4. A portion of the data for 455 CEOs is shown in the accompanying table.

1. Estimate the model: y = 0 + 1x + 2d1 + 3d2 + 4d3 + , where y and x denote compensation (in $ million) and assets (in $ billion), respectively. The nonfinancial services industry is used for reference.

2.At the 5% significance level, can we conclude that compensation is higher in Manufacturing Other than in Manufacturing Technology?

Compensation Assets d1 d2 d3 d4
16.58 20.92 1 0 0 0
26.92 32.66 1 0 0 0
11.83 64.79 0 0 1 0
0.91 0.60 1 0 0 0
3.44 2.00 1 0 0 0
10.25 10.22 1 0 0 0
25.09 46.03 0 0 1 0
8.12 2.49 0 0 1 0
14.12 58.08 0 0 1 0
2.47 6.23 0 1 0 0
11.57 35.44 0 1 0 0
7.61 2.16 0 1 0 0
9.33 8.56 0 1 0 0
15.38 3.01 0 1 0 0
10.35 4.31 1 0 0 0
6.63 3.17 1 0 0 0
4.89 13.74 0 1 0 0
23.98 156.81 0 0 1 0
3.89 2.03 1 0 0 0
33.99 106.11 0 1 0 0
11.24 19.41 0 0 1 0
3.24 18.90 0 1 0 0
14.22 37.08 0 1 0 0
29.14 121.14 0 0 1 0
7.01 23.96 0 0 1 0
21.23 916.23 0 0 1 0
7.23 1.96 1 0 0 0
24.08 31.54 1 0 0 0
13.43 38.78 0 1 0 0
9.94 16.47 0 1 0 0
2.63 0.60 1 0 0 0
5.28 21.79 0 1 0 0
5.63 10.15 0 0 1 0
6.04 12.36 0 0 1 0
3.31 3.41 0 0 1 0
2.7 21.97 0 0 1 0
60.73 208.13 0 1 0 0
4.51 8.71 0 0 0 1
4.77 5.52 0 0 1 0
5.28 4.26 0 1 0 0
2.24 1.03 1 0 0 0
64.63 23.88 0 1 0 0
13.32 5.00 0 1 0 0
8 8.26 0 1 0 0
6.29 5.10 0 1 0 0
2.46 11.91 0 0 1 0
27.87 1375.77 0 0 1 0
2.27 10.38 0 0 1 0
13.63 102.66 0 0 1 0
8.13 2.27 1 0 0 0
13.58 13.71 1 0 0 0
8.44 115.26 0 0 1 0
5.74 3.60 0 1 0 0
5.8 3.00 0 1 0 0
12.2 8.47 1 0 0 0
10.34 5.55 0 1 0 0
6.7 17.19 0 0 1 0
3.59 9.30 0 0 1 0
8.36 19.54 1 0 0 0
2.62 2.76 0 0 1 0
9.8 26.86 1 0 0 0
9.9 4.31 1 0 0 0
3.58 4.54 1 0 0 0
13.37 31.05 0 1 0 0
4.03 1.51 0 1 0 0
3.69 1.66 0 1 0 0
37.44 119.22 0 0 1 0
4.81 11.10 0 0 1 0
14.82 49.50 0 1 0 0
4.65 7.21 0 0 1 0
28.64 43.27 0 1 0 0
28.77 2.00 1 0 0 0
5.19 17.37 0 1 0 0
6.34 1.93 0 1 0 0
2.54 7.60 0 1 0 0
5.33 1.95 0 1 0 0
15.06 20.27 0 1 0 0
31.6 129.23 0 1 0 0
3.52 4.14 0 0 1 0
4.96 1.40 0 0 1 0
16.76 49.17 0 0 1 0
21.01 43.65 0 0 1 0
3.16 4.51 0 1 0 0
2.21 16.61 0 0 1 0
13.9 70.44 0 0 1 0
25.98 1689.18 0 0 1 0
9.31 18.80 0 1 0 0
4.87 15.71 0 1 0 0
32.34 29.70 0 1 0 0
5.75 24.36 0 1 0 0
1.69 1.10 1 0 0 0
23.26 8.82 0 1 0 0
1.75 1.00 0 0 0 1
26 106.90 0 1 0 0
8.61 55.51 0 0 1 0
3.61 41.87 0 0 1 0
9.98 32.50 0 0 1 0
43.44 135.89 0 1 0 0
10.28 5.37 0 1 0 0
4.72 25.77 0 1 0 0
20.06 21.64 0 1 0 0
8.62 2.48 1 0 0 0
10.01 5.30 1 0 0 0
11.29 12.14 0 1 0 0
48.13 187.52 0 0 1 0
2.04 4.57 0 1 0 0
12.94 5.28 0 0 1 0
13.77 24.68 0 1 0 0
2.96 12.48 0 0 1 0
13.58 7.18 0 1 0 0
24.02 17.93 0 0 0 1
5.17 1.91 1 0 0 0
5.07 3.85 0 1 0 0
19.61 11.01 1 0 0 0
11.03 6.91 0 1 0 0
1.59 1.82 0 1 0 0
6.14 7.02 0 0 1 0
12.97 32.67 0 1 0 0
2.33 2.43 1 0 0 0
12.47 15.39 0 1 0 0
7.3 50.96 0 1 0 0
20.62 9.51 0 1 0 0
9.07 7.10 0 1 0 0
16.82 45.76 0 1 0 0
4.16 1.87 0 1 0 0
1.55 16.65 0 0 1 0
12.17 4.10 1 0 0 0
5.95 3.07 1 0 0 0
7.33 23.56 0 1 0 0
12.9 61.71 0 1 0 0
2.63 6.44 0 0 1 0
5.43 8.83 0 1 0 0
9.95 49.15 0 0 1 0
10.69 32.53 0 1 0 0
2.99 0.86 1 0 0 0
9.45 5.95 0 1 0 0
8.37 14.78 1 0 0 0
14.13 10.82 1 0 0 0
15.74 12.64 0 0 0 1
6.56 4.11 0 1 0 0
12.74 35.53 0 1 0 0
4.63 1.24 1 0 0 0
5.89 29.55 0 1 0 0
13.64 17.52 1 0 0 0
20.21 17.68 1 0 0 0
6.61 2.73 0 1 0 0
3.18 3.98 0 1 0 0
14.76 30.97 0 1 0 0
7.97 8.58 0 1 0 0
7.08 1.81 0 0 0 1
3.43 14.59 0 0 1 0
1.34 2.36 0 0 1 0
16.43 43.56 0 1 0 0
5.09 5.30 0 0 0 1
13.01 213.68 0 1 0 0
6.93 1.99 1 0 0 0
3.64 0.85 0 0 1 0
12.83 5.91 1 0 0 0
6.11 102.95 0 0 1 0
2.15 34.36 1 0 0 0
3.07 37.25 0 0 1 0
0.98 0.86 0 0 1 0
12.75 31.52 0 1 0 0
4.41 6.15 1 0 0 0
10.75 4.72 0 0 0 1
10.52 2.29 0 1 0 0
28.18 274.33 1 0 0 0
4.41 3.42 0 1 0 0
10.8 13.94 0 1 0 0
9.5 34.41 0 1 0 0
32.11 5.47 0 1 0 0
8.79 1.37 0 1 0 0
3.29 1.18 0 0 0 1
1.36 13.66 0 0 1 0
8.15 15.98 0 1 0 0
2.28 4.95 0 1 0 0
17.12 13.49 1 0 0 0
14.5 21.04 1 0 0 0
17.86 685.00 1 0 0 0
0.24 25.27 0 0 1 0
10.19 330.23 1 0 0 0
3.8 0.57 1 0 0 0
3.84 4.63 0 0 0 1
22.45 7.04 1 0 0 0
9.61 3.93 1 0 0 0
1.05 1.94 0 0 1 0
15.83 6.68 1 0 0 0
0.56 14.37 1 0 0 0
6.6 3.08 0 0 0 1
3.07 4.09 0 1 0 0
15.3 15.95 0 1 0 0
4.34 5.39 1 0 0 0
14.24 21.40 0 0 0 1
3.41 3.15 0 1 0 0
2.79 0.93 0 0 0 1
17.49 306.05 0 0 1 0
8.41 3.20 0 1 0 0
3.7 9.92 0 1 0 0
2.03 2.98 0 1 0 0
5.4 2.69 0 1 0 0
15.01 20.78 0 1 0 0
6.84 1.82 1 0 0 0
2.35 1.18 0 1 0 0
27.7 31.29 1 0 0 0
0.1 3.54 0 0 1 0
13.12 10.03 0 0 1 0
5.33 31.79 0 0 1 0
5.8 8.48 0 0 1 0
2.84 34.05 0 0 1 0
17.03 13.56 0 0 0 1
4.76 1.46 1 0 0 0
2.46 0.53 1 0 0 0
5.39 12.66 0 1 0 0
3.46 1.26 1 0 0 0
6.99 1.94 1 0 0 0
3.97 25.47 0 0 1 0
18.21 11.95 1 0 0 0
4.31 6.16 0 1 0 0
9.81 48.34 1 0 0 0
1.86 10.65 0 0 1 0
2.01 2.56 0 1 0 0
13.73 26.40 0 0 0 1
7.17 11.90 0 0 0 1
10.57 7.24 1 0 0 0
2.91 0.58 0 0 0 1
14.54 3.58 0 0 1 0
4.99 3.70 0 1 0 0
19.9 15.30 0 0 1 0
0.26 4.37 0 1 0 0
28.56 64.71 1 0 0 0
4.02 4.19 0 0 0 1
39.05 1275.23 0 0 1 0
6.52 7.78 1 0 0 0
2.32 4.53 0 1 0 0
14.35 10.64 0 1 0 0
12.02 92.73 0 0 1 0
10.69 16.69 0 1 0 0
2.89 6.70 0 0 1 0
0.0001 12.73 0 1 0 0
6.38 1.89 0 0 0 1
4.99 3.15 1 0 0 0
1.33 0.53 0 1 0 0
9.64 56.60 0 1 0 0
3.05 0.37 1 0 0 0
3.69 12.60 1 0 0 0
21.51 3.94 0 0 0 1
3.23 3.29 0 1 0 0
2.23 4.17 0 1 0 0
10.06 3.09 1 0 0 0
15.23 23.27 1 0 0 0
18.13 151.68 0 0 1 0
9.81 3.32 0 1 0 0
18.6 27.99 1 0 0 0
5.04 73.89 0 0 1 0
3.58 3.51 0 1 0 0
6.36 2.82 1 0 0 0
15.06 4.38 0 1 0 0
2.3 56.11 0 0 1 0
15.34 3.89 0 1 0 0
3.67 4.34 0 0 1 0
17.25 2.37 0 0 0 1
21.37 29.66 0 1 0 0
12.6 8.56 0 0 0 1
8.09 51.22 0 0 1 0
6.3 0.60 0 1 0 0
17.29 12.44 0 1 0 0
5.33 2.86 0 1 0 0
5.99 4.66 0 1 0 0
14.29 37.16 0 0 1 0
12.71 29.48 0 0 0 1
19.88 6.22 0 0 1 0
6.16 9.10 0 1 0 0
9.14 14.42 0 0 1 0
17.04 102.66 0 0 1 0
10.24 44.71 1 0 0 0
91.38 761.16 0 0 1 0
19.36 504.68 0 0 1 0
7.21 6.49 0 0 1 0
2.95 2.21 1 0 0 0
6.68 11.70 0 1 0 0
6.25 1.82 0 0 0 1
8.2 1.48 0 0 0 1
8.66 6.93 0 1 0 0
30.8 8.19 0 1 0 0
0.76 141.29 0 0 1 0
0.23 0.66 1 0 0 0
4.93 7.85 0 1 0 0
6.97 5.26 1 0 0 0
4.4 4.21 0 1 0 0
7.58 6.38 0 1 0 0
2.06 4.24 0 1 0 0
7.33 4.47 0 1 0 0
24.44 25.94 0 1 0 0
8.28 18.56 1 0 0 0
4.99 11.94 0 1 0 0
11.01 57.07 0 0 1 0
21.66 33.11 1 0 0 0
6.22 2.33 1 0 0 0
55.63 29.27 0 1 0 0
11.75 6.33 0 0 0 1
5.57 6.24 0 0 0 1
4.77 4.90 0 1 0 0
13.24 16.86 0 0 0 1
9.65 9.85 0 1 0 0
2.45 0.76 0 0 0 1
7.38 14.91 1 0 0 0
7.91 2.79 0 1 0 0
6.04 8.18 0 1 0 0
7.67 4.35 0 0 0 1
5.5 11.73 0 1 0 0
9.38 30.83 0 1 0 0
7.2 2.60 1 0 0 0
2.34 1.48 1 0 0 0
9.8 116.26 1 0 0 0
7.99 34.44 0 1 0 0
9.43 12.50 0 1 0 0
2.11 3.18 0 0 1 0
7.52 11.39 0 1 0 0
9.37 9.62 1 0 0 0
4.63 4.74 0 0 0 1
1.25 0.87 1 0 0 0
18.07 96.89 0 0 1 0
9.15 6.32 0 1 0 0
2.35 0.78 1 0 0 0
2.79 1.13 0 1 0 0
8.89 9.37 0 1 0 0
4.59 10.80 0 1 0 0
16.85 135.35 0 0 1 0
9.86 26.38 0 1 0 0
5.43 19.19 0 0 1 0
4.68 14.52 0 0 1 0
25.75 433.82 0 0 1 0
9.17 29.19 0 1 0 0
7.68 8.38 0 0 1 0
15.69 13.12 0 1 0 0
9.08 5.48 0 0 0 1
4.01 4.72 0 1 0 0
3.53 2.14 0 0 0 1
5.67 1.90 0 1 0 0
17.23 24.94 1 0 0 0
18.43 114.08 0 0 1 0
3.33 2.69 0 0 0 1
8.17 16.35 0 1 0 0
13.04 1.39 0 0 0 1
8.74 9.62 0 1 0 0
4.9 6.43 0 0 0 1
6.14 14.55 0 0 1 0
7 16.02 0 0 0 1
9.97 5.04 1 0 0 0
29.66 15.77 1 0 0 0
17.53 20.45 0 1 0 0
6.53 1.47 0 0 0 1
9.92 4.19 0 1 0 0
2.1 3.07 0 1 0 0
1.99 4.94 0 1 0 0
12.18 29.10 0 1 0 0
4.52 8.64 0 0 0 1
7.35 4.68 0 0 0 1
5.57 8.35 0 1 0 0
1.93 2.23 1 0 0 0
3.24 0.64 1 0 0 0
3.1 21.61 0 0 1 0
16.63 107.74 0 0 1 0
8.69 4.70 0 1 0 0
5.16 2.33 0 1 0 0
7.85 41.37 0 1 0 0
1.41 13.73 0 1 0 0
21.3 99.96 0 1 0 0
8.15 5.37 0 1 0 0
5.79 4.82 1 0 0 0
3.82 13.05 0 0 1 0
8.45 4.39 0 1 0 0
6.16 3.74 0 1 0 0
9.96 10.89 0 0 0 1
26.76 102.66 0 0 1 0
6.05 5.43 1 0 0 0
22.96 10.46 0 1 0 0
7.57 180.94 0 0 1 0
9.21 1.68 1 0 0 0
4.98 29.79 0 0 1 0
5.1 2.54 0 0 1 0
4.2 7.27 0 1 0 0
3.34 3.72 1 0 0 0
12.37 21.05 0 1 0 0
9.5 9.18 0 0 0 1
3 1.79 1 0 0 0
15.48 4.49 0 1 0 0
11.72 14.50 1 0 0 0
23.67 17.02 1 0 0 0
7.09 2.61 0 0 0 1
5.63 48.17 0 0 1 0
11.35 4.21 0 1 0 0
3.65 14.27 0 0 1 0
4.2 1.58 0 0 1 0
16.08 114.24 0 0 1 0
10.71 12.76 1 0 0 0
8.21 1.88 1 0 0 0
22.48 127.73 0 1 0 0
2.03 14.87 0 0 1 0
4.47 10.97 0 1 0 0
6.34 13.97 0 1 0 0
7.07 3.01 1 0 0 0
17.94 10.68 1 0 0 0
10.01 25.69 0 1 0 0
5.92 214.35 0 0 1 0
2.42 9.16 0 0 1 0
8.28 36.07 0 1 0 0
0.96 1.67 0 1 0 0
15.55 44.80 0 0 1 0
6.17 34.08 0 1 0 0
5.43 5.55 0 1 0 0
8.64 10.20 0 1 0 0
3.47 1.55 0 0 0 1
27.17 46.53 1 0 0 0
14.48 3.07 0 0 0 1
4.7 52.35 0 0 1 0
12.3 5.75 0 1 0 0
3.02 0.75 0 0 0 1
9.94 35.28 0 1 0 0
5.38 12.42 0 0 1 0
1.7 0.76 1 0 0 0
1.61 0.94 0 0 0 1
21.26 178.47 0 1 0 0
5.92 0.74 1 0 0 0
3.19 4.61 1 0 0 0
4.56 15.80 0 0 1 0
16.02 3.51 0 1 0 0
23.85 613.94 0 0 1 0
14.25 344.93 0 0 1 0
5.6 20.87 0 1 0 0
4.48 1.52 1 0 0 0
3.68 3.42 1 0 0 0
14.03 9.36 0 1 0 0
3.08 17.47 0 0 1 0
23.89 51.43 0 0 1 0
29.85 481.87 0 0 1 0
4.17 2.75 0 0 0 1
5.55 2.24 0 0 0 1
1.97 4.96 0 0 1 0
1.07 5.33 0 1 0 0
8.25 11.03 1 0 0 0
10.34 27.42 0 1 0 0
2.55 10.70 0 0 1 0
1.04 4.53 0 1 0 0
32.85 36.16 1 0 0 0
11.2 21.73 0 1 0 0
10.69 21.83 1 0 0 0
8.85 58.88 0 0 1 0
52.06 11.37 0 1 0 0
39.82 11.17 1 0 0 0
4.48 5.79 0 1 0 0
12.43 6.08 0 0 0 1
1.76 0.94 1 0 0 0
11.99 5.85 1 0 0 0
2.3 44.88 0 0 1 0

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