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Regression Hypothesis Test

Regression Hypothesis Test using Education vs. Experience and their relation to Salary Earnings:

a. Formulate a hypothesis statement regarding your research issue. Please see attached excel worksheet for data.

People who possess a Bachelor's degree earn a higher salary than those without a Bahelor's degree, we included 13 degreed people's salaries and 43 non-degreed people's salaries. Use alpha = 0.10 to determine whether reject or do not reject the null hypothesis.

b. Perform a regression hypothesis test on the data.
Write the fitted regression equation
c. Interpret the results of your regression hypothesis test as it relates to the correlation of Education & Salary versus Experience & Salary.

1) What does the R-squared value tell you?
2) What, if any, meaning does the intercept have?
3) Using an alpha value of 0.10, which variables are significant (education years of experience) to salary earnings?

[Please refer to the attachment for the data]

Attachments

Solution Preview

Please see the attached file.

Education and Salary
Formulate a hypothesis statement regarding your research issue. Please see attached excel worksheet for data.

Solution:
Since we are going to test the hypothesis using correlation (regression) hypothesis test, therefore the null and alternate hypothesis will be as follows:

Null Hypothesis: Educational qualification and Salary are uncorrelated.
ρ=0
Alternate Hypothesis: Educational qualification and Salary are correlated.
ρ≠0

b. Perform a regression hypothesis test on the data.

Solution: [Please refer to the EXCEL attachment for ...

Solution Summary

The solution provides step-by-step method of performing a Regression Hypothesis Test in EXCEL. All the steps of hypothesis testing (formulation of null and alternate hypotheses, selection of significance level, choosing the appropriate test-statistic, decision rule, calculation of test-statistic and conclusion) have been explained and the Regression Analysis has been shown in details.

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