# SPSS: Regression analysis question

Wageweb conducts surveys of salary data and presents summaries on its website. Based on salary data as of October 1, 2002, Wageweb reported the average annual salary for sales vice presidents was $142,111, with an average annual bonus of $15,432. Assume the following data are a sample of the annual salary and bonus for 10 vice presidents.

Data are in thousands of dollars.

Using SPSS:

1. Compute and interpret the coefficient of determination (r2)

2. Develop a plot of the residuals against the independent variable and briefly interpret the plot

Please see attached files for description of question and data files.

This is a compute and interpret the coefficient of determination question and involves developing and interpreting a plot of residuals

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#### Solution Preview

Hi

Please find attached response to your question.

Regards

The Regression Model is developed by assuming the relationship that Bonus is a function of Salary. The regression equation tested therefore is:

Bonus = constant + beta * Salary + error

Using Bonus as dependent variable and Salary as independent variable, regression is run in SPSS. The results are attached in the SPSS Output and also presented below:

Model Summary(b)

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .925(a) .855 .837 2.084

a Predictors: (Constant), Salary

b Dependent Variable: Bonus

ANOVA(b)

Model Sum of Squares df Mean Square F Sig.

1 Regression 205.259 1 205.259 47.266 .000(a)

Residual 34.741 8 4.343

Total 240.000 9

a Predictors: (Constant), Salary

b Dependent Variable: Bonus

Coefficients(a)

Model Unstandardized Coefficients Standardized Coefficients t Sig.

B Std. Error Beta

1 (Constant) -10.164 3.862 -2.632 .030

Salary .184 .027 .925 6.875 .000

a Dependent Variable: Bonus

The value of Rsq. (Coefficient ...

#### Solution Summary

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