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Hourly Wage Linear Regression

Data from a study of 534 U.S. workers from 1985 includes information about each worker's hourly wage (measured in U.S. dollars/hour) and age (measured in years). First, linear regression is performed to estimate the relationship between hourly wage and age (years), and the resulting slope of age is 0.08, and correlation coefficient (r) = 0.18. (both are positive) This analysis is repeated with the same data, but the units of age are changed from years to months (age in years / 12), and a second regression is performed relating hourly wages to age (months). In this repeated analysis (compared to the first):

a. the slope and correlation coefficient would both increase
b. the slope and correlation coefficient would both decrease
c. the slope would increase, but the correlation coefficient would remain the same
d. the slope would decrease, but the but the correlation coefficient would remain the same
e the slope would remain the same, but the correlation coefficient would increase
f. the slope would remain the same, but the correlation coefficient would increase

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The answer is

d. the slope would decrease, but the but the correlation coefficient would remain the same

The ...

Solution Summary

The solution identifies the correct option of what the second regression analysis would be like compared to the first. Brief explanations with examples are included for further understanding.

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