A5 The model below explains CEO salary (salary) expressed in thousands of pounds as a function of a firm’s sales in million pounds (sales), the return on a firm’s equity (roe), and the industry in which the firm is operating. There are two industries in the sample, services and consumer goods. These industries are captured respectively by two dummy variables, service and goods. The regression based on a sample of 209 firms is as follows: salary = 4.5 + 0.27sales + 0.015roe – 0.08service (0.24) (0.03) (0.05) (0. 05) R-squared = 0.35 SSR(Residual Sum of Squares) = 42.9 Implement an F-test for whether the determinants of CEO salaries differ significantly between service and consumer goods industries. What do you conclude?
A5 The model below explains CEO salary (salary) expressed in thousands of pounds as a function of a firm’s sales in million pounds (sales), the return on a firm’s equity (roe), and the industry in which the firm is operating. There are two industries in the sample, services and consumer goods. These industries are captured respectively by two dummy variables, service and goods. The regression based on a sample of 209 firms is as follows: salary = 4.5 + 0.27sales + 0.015roe – 0.08service (0.24) (0.03) (0.05) (0. 05) R-squared = 0.35 SSR(Residual Sum of Squares) = 42.9 Implement an F-test for whether the determinants of CEO salaries differ significantly between service and consumer goods industries. What do you conclude?
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter4: Equations Of Linear Functions
Section4.6: Regression And Median-fit Lines
Problem 23PFA
Related questions
Question
A5
The model below explains CEO salary (salary) expressed in thousands of pounds as a function of a firm’s sales in million pounds (sales), the return on a firm’s equity (roe), and the industry in which the firm is operating. There are two industries in the sample, services and consumer goods. These industries are captured respectively by two dummy variables, service and goods.
The regression based on a sample of 209 firms is as follows:
salary = 4.5 + 0.27sales + 0.015roe – 0.08service
(0.24) (0.03) (0.05) (0. 05)
R-squared = 0.35
SSR(Residual Sum of Squares) = 42.9
Implement an F-test for whether the determinants of CEO salaries differ significantly between service and consumer goods industries. What do you conclude?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Recommended textbooks for you
Glencoe Algebra 1, Student Edition, 9780079039897…
Algebra
ISBN:
9780079039897
Author:
Carter
Publisher:
McGraw Hill
Algebra and Trigonometry (MindTap Course List)
Algebra
ISBN:
9781305071742
Author:
James Stewart, Lothar Redlin, Saleem Watson
Publisher:
Cengage Learning
College Algebra
Algebra
ISBN:
9781305115545
Author:
James Stewart, Lothar Redlin, Saleem Watson
Publisher:
Cengage Learning
Glencoe Algebra 1, Student Edition, 9780079039897…
Algebra
ISBN:
9780079039897
Author:
Carter
Publisher:
McGraw Hill
Algebra and Trigonometry (MindTap Course List)
Algebra
ISBN:
9781305071742
Author:
James Stewart, Lothar Redlin, Saleem Watson
Publisher:
Cengage Learning
College Algebra
Algebra
ISBN:
9781305115545
Author:
James Stewart, Lothar Redlin, Saleem Watson
Publisher:
Cengage Learning
Functions and Change: A Modeling Approach to Coll…
Algebra
ISBN:
9781337111348
Author:
Bruce Crauder, Benny Evans, Alan Noell
Publisher:
Cengage Learning
College Algebra (MindTap Course List)
Algebra
ISBN:
9781305652231
Author:
R. David Gustafson, Jeff Hughes
Publisher:
Cengage Learning
