For Exercises 1–3, test whether a linear relationship exists between and , using level of significance .
eduearn
1. Education and Earnings. The U.S. Census Bureau reports the mean annual earnings of American citizens according to the number of years of education. We are interested in the relationship between earnings (, in thousands of dollars) and years of education .
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| Education | Annual earnings |
|---|---|
| 8 | 18.6 |
| 10 | 18.9 |
| 12 | 27.3 |
| 13 | 29.7 |
| 14 | 34.2 |
| 16 | 51.2 |
| 18 | 60.4 |
13.99.1
: There is no linear relationship between Education () and Annual Earnings (). : There is a linear relationship between Education () and Annual Earnings (). Reject if or . Since , we reject . There is evidence at level of significance that and that there is a linear relationship between Education () and Annual Earnings ().