Job market compensation. An article in Research in Economics (Vol. 74, 2020) showed that reflective accountants receive higher job compensation (wages) compared to their impulsive peers. One part of the article analyzed the income (y) and the original Cognitive Reflection Test (CRT) survey of accountants’ profiles, performed by the Brazilian Accountants Association (BAA) with a sample of 12,982 Brazilian professional accountants. They assigned the CRT score as a dummy variable (x1) with a value of 1 if the person was reflective (CRT score = 2 or 3) and 0 if they were impulsive (CRT score = 0 or 1). The results show that yn = .2 + .437x1, R2 = .03, t = 18.70 for testing H0: b1 = 0 (p@value 6 .000)

a. Give a practical interpretation of the value, .2.

b. Give a practical interpretation of the value, .437.

c. What inference can you make about the relationship between income and the dummy variable of the CRT score.