Use Indicator (Dummy) Variables in Multiple Regression A) That the Annual Average Bonus Is $605
Use indicator (dummy) variables in multiple regression.
-A sample of 30 companies was randomly selected for a study investigating what
Factors affect the size of company bonuses. Data were collected on the number of
Employees at the company and whether or not the employees were unionized (1 = yes,
0 = no) . The following multiple regression model was fit to the data. The correct
Interpretation of the regression coefficient of Union is
A) that the annual average bonus is $605.80 less, on average, for unionized companies compared to non-unionized companies of the same size (same number of employees) .
B) that the annual average bonus is $605.80 more, on average, for unionized companies compared to non-unionized companies of the same size (same number of employees) .
C) that the annual average bonus is $1259.50 less, on average, for unionized companies compared to non-unionized companies of the same size (same number of employees) .
D) that the annual average bonus is $1259.50 more, on average, for unionized companies compared to non-unionized companies of the same size (same number of employees) .
E) that the annual average bonus is $208 more, on average, for unionized companies
Correct Answer:
Verified
Q1: Adjust for different slopes using interaction
Q3: Check for collinearity among predictor variables
Q4: Adjust for different slopes using interaction terms
Q5: Interpret output from automatic multiple regression
Q6: Adjust for different slopes using interaction
Q7: Apply principles of the multiple regression model
Q8: Use indicator (dummy) variables in multiple
Q9: Use indicator (dummy) variables in multiple regression.
-A
Q10: Use indicator (dummy) variables in multiple
Q11: Check for collinearity among predictor variables
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