Given Income_i= 10 + 1.5Age_i+ e_i, interpret the model A) A one year increase in age is expected to lead to a 1.5 increase in income B) A 1.5 increase in age is expected to lead to a 1 increase in income C) A 1.5 increase in income is expected to lead to a 1 unit increase in age D) Income is 10

Question

Quizplus · Accepted Answer

The model suggests that income (_{) is influenced by age (}), with a coefficient of 1.5. Therefore, a one year increase in age is expected to lead to a 1.5 unit increase in income. The "e" term in the model represents the error term, which reflects the unexplained variation in income that is not accounted for by age.

Given Incomei = 10 + 1

Given Income_i= 10 + 1