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Multiple Regression Model

The document presents a multiple regression model that predicts an employee's current salary based on their educational level, previous experience, months since hire, training, and beginning salary. It finds that all of the independent variables are statistically significant predictors of current salary, with previous experience having the strongest effect. The model explains 98.9% of the variation in current salaries.

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mtr_dintu
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77 views

Multiple Regression Model

The document presents a multiple regression model that predicts an employee's current salary based on their educational level, previous experience, months since hire, training, and beginning salary. It finds that all of the independent variables are statistically significant predictors of current salary, with previous experience having the strongest effect. The model explains 98.9% of the variation in current salaries.

Uploaded by

mtr_dintu
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Interpretations

Dependent & Independent Variables:

Here, we can see that Current salary depends on educational level, previous experience, months
since hire, training and beginning salary. As these five variables increase, current salary
increases, and if these five variables decrease, current salary decreases. So, we can say that, here
current salary is the dependent variable and the five variables; educational level, previous
experience, months since hire, training and beginning salary are the independent variable.

Multiple Regression Model:

Current Salary = 4805.749 + 229.242 education level + 456.521 previous experience + 135.416
months since hire + 137.658 total training +.378 beginning salary

Interpretation of coefficients:

Constant = If there is no education, previous experience, months since hire ,training and
beginning salary the current salary is 4805.749 dollar.

Educational level(years) = If there is 1 year increase in educational level then persons current
salary will increase by 229.242 dollar when previous experience, months since hire, training and
beginning salary is fixed.

Previous experience(months) = If the persons previous experience increases by 1 month then the
persons current salary will increase by 456.521 dollar when education level, months since hire,
training and beginning salary is fixed.
Months since hire = If the persons months since hire increases by 1 month then the persons
current salary will increase by 135.416 dollar when education level, previous experience,
training and beginning salary is fixed.

Total training (months) = If the persons total training increases by 1 month then the persons
current salary will increase by 137.658 dollar when education level, previous experience, months
since hire and beginning salary is fixed.

Beginning salary = If the persons beginning salary increases by 1 dollar then the persons current
salary will increase by .378 dollar when education level, previous experience, months since hire
and training is fixed.

Interpretation ofr 2:

It means that education, previous experience, months since hire, training and beginning salary
can explain the salary is about 98.9% and rest is unexplained.
Importance of the variables:

Education:

H 0 : β edu = 0

H A : β edu ≠ 0

t cal = 3.033

t tab= ±1.96

Here, t cal > t tab

So, we may reject the null hypothesis. So, education is important.

Previous experience:

H 0 : β pre. exp = 0

H A : β pre. exp ≠ 0

t cal = 8.567

t tab= ±1.96

Here, t cal > t tab

So, we may reject the null hypothesis. So, previous experience is important.
Months since hire:

H 0 : β mon .sin. hire = 0

H A : β mon .sin. hire ≠ 0

t cal = 4.893

t tab= ±1.96

Here, t cal > t tab

So, we may reject the null hypothesis. So, months since hire is important.

Training:

H 0 : β traning = 0

H A : β traning ≠ 0

t cal = 2.783

t tab= ±1.96

Here, t cal > t tab

So, we may reject the null hypothesis. So, training is important.


Beginning salary:

H 0 : β beg . sal = 0

H A : β beg . sal ≠ 0

t cal = 6.809

t tab= ±1.96

Here, t cal > t tab

So, we may reject the null hypothesis. So, beginning salary is important.

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