Fred G. Hire is the manager of human resources at Crescent Tool and Die Inc. As part of his yearly report to the CEO, he is required to present an analysis of the salaried employees. Because there are over 1,000 employees, he does not have the staff to gather information on each salaried employee, so he selects a random sample of 30. For each employee, he records monthly salary; service at Crescent, in months; gender (1 = male, 0 = female); and whether the employee has a technical or clerical job. Those working technical jobs are coded 1, and those who are clerical 0.
a. Determine the regression equation, using salary as the dependent variable and the other four variables as independent variables.
b. What is the value of R2? Comment on this value
c. Conduct a global test of hypothesis to determine whether any of the independent variables are different from 0.
d. Conduct an individual test to determine whether any of the independent variables can be dropped.
e. Rerun the regression equation, using only the independent variables that are significant. How much more does a man earn per month than a woman? Does it make a difference whether the employee has a technical or a clericaljob?
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