Imagine you are interested in researching the relationship between job experience and income among early-career working professionals.You take a random sample of 32 professionals from the nearest city,and you ask them to report their annual income and submit a resumé outlining their professional experience.You later calculate their years of experience from their resumés.You compute the following information:
Assume,for the above example,that you calculated the estimated standard error of the estimate to be,11.20.How should this standard error of the estimate be interpreted?
A)It gives you an indication of the inaccuracy in predicting income from years of experience.
B)It gives you an indication of the inaccuracy in predicting years of experience from income.
C)Both a and b
D)Neither a nor b

Question

Imagine you are interested in researching the relationship between job experience and income among early-career working professionals.You take a random sample of 32 professionals from the nearest city,and you ask them to report their annual income and submit a resumé outlining their professional experience.You later calculate their years of experience from their resumés.You compute the following information: 
Assume,for the above example,that you calculated the estimated standard error of the estimate to be,11.20.How should this standard error of the estimate be interpreted?
A)It gives you an indication of the inaccuracy in predicting income from years of experience. 
B)It gives you an indication of the inaccuracy in predicting years of experience from income. 
C)Both a and b 
D)Neither a nor b

Quizplus · Accepted Answer

The standard error of the estimate is a measure of the accuracy of predictions made by the regression model. In this case, the estimated standard error of the estimate (11.20) indicates how much the predicted income based on years of experience may deviate from the actual income of the professionals in the sample. Therefore, the correct interpretation is that the standard error of the estimate gives an indication of the inaccuracy in predicting income from years of experience. Option B is incorrect because the question is about predicting income from years of experience, not the other way around. Option C is incorrect because it contradicts itself by suggesting that the standard error represents the inaccuracy in both predicting income from years of experience and predicting years of experience from income. Option D is incorrect because the standard error is a meaningful measure of predictive accuracy.

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