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Incomes of Physicians an Economist Is Analyzing the Incomes of Physicians (General

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Incomes of Physicians
An economist is analyzing the incomes of physicians (general practitioners,surgeons,and psychiatrists).He realizes that an important factor is the number of years of experience.However,he wants to know if there are differences among the three professional groups.He takes a random sample of 125 physicians and estimates the multiple regression model y = β0 + β1x1 + β2x2 + β3x3 + ε,where y = annual income (in $1,000),x1 = years of experience,x2 = 1 if physician and 0 if not,and x3 = 1 if surgeons and 0 if not.The computer output is shown below. THE REGRESSION EQUATION IS y = 71.65 + 2.07x1 + 10.16x2− 7.44x3  Incomes of Physicians  An economist is analyzing the incomes of physicians (general practitioners,surgeons,and psychiatrists).He realizes that an important factor is the number of years of experience.However,he wants to know if there are differences among the three professional groups.He takes a random sample of 125 physicians and estimates the multiple regression model y = β<sub>0</sub> + β<sub>1</sub>x<sub>1</sub> + β<sub>2</sub>x<sub>2</sub> + β<sub>3</sub>x<sub>3</sub> + ε,where y = annual income (in $1,000),x<sub>1</sub> = years of experience,x<sub>2</sub> = 1 if physician and 0 if not,and x<sub>3</sub> = 1 if surgeons and 0 if not.The computer output is shown below. THE REGRESSION EQUATION IS y = 71.65 + 2.07x<sub>1</sub> + 10.16x<sub>2</sub>− 7.44x<sub>3</sub>   S = 42.6 R−Sq = 30.9% ANALYSIS OF VARIANCE   ​ ​ -{Incomes of Physicians Narrative} Estimate the annual income for a psychiatrist with 15 years of experience. S = 42.6 R−Sq = 30.9% ANALYSIS OF VARIANCE  Incomes of Physicians  An economist is analyzing the incomes of physicians (general practitioners,surgeons,and psychiatrists).He realizes that an important factor is the number of years of experience.However,he wants to know if there are differences among the three professional groups.He takes a random sample of 125 physicians and estimates the multiple regression model y = β<sub>0</sub> + β<sub>1</sub>x<sub>1</sub> + β<sub>2</sub>x<sub>2</sub> + β<sub>3</sub>x<sub>3</sub> + ε,where y = annual income (in $1,000),x<sub>1</sub> = years of experience,x<sub>2</sub> = 1 if physician and 0 if not,and x<sub>3</sub> = 1 if surgeons and 0 if not.The computer output is shown below. THE REGRESSION EQUATION IS y = 71.65 + 2.07x<sub>1</sub> + 10.16x<sub>2</sub>− 7.44x<sub>3</sub>   S = 42.6 R−Sq = 30.9% ANALYSIS OF VARIANCE   ​ ​ -{Incomes of Physicians Narrative} Estimate the annual income for a psychiatrist with 15 years of experience. ​ ​
-{Incomes of Physicians Narrative} Estimate the annual income for a psychiatrist with 15 years of experience.


Definitions:

Bad Debt

Money owed to a company that is unlikely to be paid by the debtor, often leading to the creditor writing it off as a loss.

Percentage of Sales

A method used to forecast financial figures, such as net income or expenses, based on a percentage of the sales volume.

Dishonored

Refers to a check or promissory note that has been refused by the bank on which it was drawn because of insufficient funds or other reasons.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

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