An investigator hired by a client suing for sex discrimination has developed a multiple regression model for employee salaries for the company in question.In this multiple regression model,the salaries are in thousands of dollars.For example,a data entry of 35 for the dependent variable indicates a salary of $35,000.The indicator (dummy)variable for gender is coded as X₁ = 0 if male and X₁ = 1 if female.The computer output of this multiple regression model shows that the coefficient for this variable (X₁)is −4.2.The t test showed that X₁ was significant at α= 0.1.This result implies that for male and female workers of the company, A) on the average,females earn $4,200 less. B) on the average,males earn $4,200 less. C) on the average,salaries do not differ. D) on the average,males have 4.2 more years of experience. E) on the average,females have 4.2 more years of experience.

Question

Quizplus · Accepted Answer

The coefficient for the gender variable is negative (-4.2), indicating that females earn less than males. Since the salaries are in thousands of dollars, a coefficient of -4.2 means that, on average, females earn $4,200 less than males. The significance of the variable at α=0.1 means that there is strong evidence that the gender variable is associated with salary, with a low probability of this result occurring by chance.

An Investigator Hired by a Client Suing for Sex Discrimination