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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
From a sample of 209 firms, Wooldridge obtained the following regres- sion results * :
log (s - alary ) = 4.32 + 0.280 log (sales) + 0.0174 roe + 0.00024 ros se = (0.32) (0.035) (0.0041) (0.00054)
R 2 = 0.283
where salary = salary of CEO sales = annual firm sales
roe = return on equity in percent ros = return on firm’s stock
and where figures in the parentheses are the estimated standard errors.
Interpret the preceding regression taking into account any prior expec- tations that you may have about the signs of the various coefficients.
Which of the coefficients are individually statistically significant at the 5 percent level?
What is the overall significance of the regression? Which test do you use? And why?
Can you interpret the coefficients of roe and ros as elasticity coeffi- cients? Why or why not?
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