A Sample of 30 Companies Was Randomly Selected for a Study

question 3

Essay

A sample of 30 companies was randomly selected for a study investigating what factors affect the size of company bonuses. Data were collected on the number of employees at the company and whether or not the employees were unionized (1 = yes, 0 = no). Below are the multiple regression results. a. Write out the estimated regression equation.
b. Are all of the independent variables significant in this regression equation (using α = 0 .05)? Explain.
c. Interpret the coefficient of the Union.
d. Based on the scatterplot below, do you think using Union as an indicator variable in this model is appropriate? Explain. e. An alternative multiple regression model is fit to these data and the results are shown below. Which model is better? Explain. f. Using the better model, predict the annual average bonus for a company with 7500 employees that are not unionized.

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Definitions:

Blue Currency

Informal term possibly referring to a foreign currency held in accounts outside the country of origin, often in a stronger, more stable currency.

Ambrosia

In classical mythology, the food of the gods, believed to convey immortality; in contemporary contexts, a type of fruit salad.

Bubble Gum

A kind of bubble gum made to be blown into a bubble outside the mouth.

Income

Earnings received by individuals or entities, typically through wages, investments, or other sources.