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Mathematics Clinic => Statistics => Topic started by: Jipu 123 on Jan 16, 2020

Title: Each year a nationally recognized publication conducts its "Survey of America's Best Graduate and ...
Post by: Jipu 123 on Jan 16, 2020

Each year a nationally recognized publication conducts its "Survey of America's Best Graduate and Professional Schools." An academic advisor wants to predict the typical starting salary of a graduate at a top business school using GMAT score of the school as a predictor variable.  Total GMAT scores range from 200 to 800. A simple linear regression of SALARY versus GMAT using 25 data points shown below.
= -92040  ₁ = 228  s = 3213  R² = 0.66  r = 0.81  df = 23  t = 6.67
Give a practical interpretation of = -92040.
◦ We estimate SALARY to decrease $92,040 for every 1-point increase in GMAT.
◦ The value has no practical interpretation since a GMAT of 0 is nonsensical and outside the range of the sample data.
◦ We estimate the base SALARY of graduates of a top business school to be $-92,040.
◦ We expect to predict SALARY to within 2(92040) = $184,080 of its true value using GMAT in a straight-line model.

Title: Each year a nationally recognized publication conducts its "Survey of America's Best Graduate and ...
Post by: joewallace on Jan 16, 2020

The value has no practical interpretation since a GMAT of 0 is nonsensical and outside the range of the sample data.