Consider the following OLS regression results, In(inc)=1.970+.083educ, R2=.186, where inc represents annual income (in $1000s) and educ represents years of education. The R² can be interpreted as .186% of the variation in annual income is explained by years of education. 186% of the variation in log annual income is explained by years of education. 18.6% of the variation in annual income is explained by years of education. O 18.6% of the variation in log annual income is explained by years of education.

Consider the following OLS regression results, In(inc)=1.970+.083educ, R2=.186, where inc represents annual income (in $1000s) and educ represents years of education. The R² can be interpreted as .186% of the variation in annual income is explained by years of education. 186% of the variation in log annual income is explained by years of education. 18.6% of the variation in annual income is explained by years of education. O 18.6% of the variation in log annual income is explained by years of education.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4A: Problems In Applying The Linear Regression Model

Section: Chapter Questions

Problem 1E

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In the December, 1969, American Economic Review (pp. 886-896), Nathanial Leff reports thefollowing least squares regression results for a cross section study of the effect of age composition onsavings in 74 countries in 1964:log S/Y = 7.3439 + 0.1596 log Y/N + 0.0254 log G - 1.3520 log D1 - 0.3990 log D2 (R2= 0.57)log S/N = 8.7851 + 1.1486 log Y/N + 0.0265 log G - 1.3438 log D1 - 0.3966 log D2 (R2= 0.96)where S/Y = domestic savings ratio, S/N = per capita savings, Y/N = per capita income, D1 = percentage ofthe population under 15, D2 = percentage of the population over 64, and G = growth rate of per capitaincome. Are these results correct? Explain..
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