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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
C1 The data in 401K.RAW are a subset of data analyzed by Papke (1995) to study the rela- tionship between participation in a 401(k) pension plan and the generosity of the plan. The variable prate is the percentage of eligible workers with an active account; this is the variable we would like to explain. The measure of generosity is the plan match rate, mrate . This variable gives the average amount the firm contributes to each worker’s plan for each $1 contribution by the worker. For example, if mrate 5 0.50, then a $1 contribution by the worker is matched by a 50¢ contribution by the firm.
Find the average participation rate and the average match rate in the sample of plans.
Now, estimate the simple regression equation
 prate 5 b ˆ 1 b ˆ mrate ,
0 1
and report the results along with the sample size and R -squared.
Interpret the intercept in your equation. Interpret the coefficient on mrate .
Find the predicted prate when mrate 5 3.5. Is this a reasonable prediction? Explain what is happening here.
How much of the variation in prate is explained by mrate ? Is this a lot in your opinion?
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