Question 10.18

10.18 The relationship between log income and education level for employees.

Recall Case 10.1 (pages 485–486). The researchers also looked at the relationship between education and log income for employees. An employee was defined as a person whose main employment status is a salaried job. Based on a sample of 100 employees:

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  1. Construct a scatterplot of log income versus education. Describe the relationship between the two variables. Is a linear relationship reasonable? Explain your answer.
  2. Report the least-squares regression line.
  3. Obtain the residuals and use them to assess the assumptions needed for inference.
  4. In Example 10.5 (pages 497–498), we constructed a 95% confidence interval for the slope of the entrepreneur population. It was (0.0208 to 0.2044). Construct a 95% confidence interval for the slope of the employee population.
  5. Compare the two confidence intervals. Do you think there is a difference in the two slopes? Explain your answer.