DSC04975

test for this parameter.

10.9

We assume that our wages will increase as we gain experience and become morę valuable to our employers. Wages also increase because of inflation. By examining a sample of employees at a given point in time, we can look at part of the picture. How does length of service (LOS) relate to wages? Table 10.1 gives data on the LOS in months and wages for 60 women who work in Indiana banks. Wages are yearly total income divided by the number of weeks worked. We have multiplied wages by a constant for reasons of confidentiality.¹²

(a)    Plot wages versus LOS. Describe the relationship. There is one woman with relatively high wages for her length of service. Circle this point and do not use it in the rest of this exercise.

(b)    Find the least-squares linę. Summarize the significance test for the slope. What do you ęonclude?

(c)    State carefully what the slope tells you about the relationship between wages and length of servicę.^{; :}

(d)    Give a 99% confidence interval for the slope.

TABLE 10.1 Bank wages and length of service

Wages	LOS	Size	Wages	LOS	Size	Wages
48.3355	94	Large	64.1026	24	Large	41.2088
49.0279	48	Smali	54.9451	222	Smali	67.9096
40.8817	102	Smali	43.8095,,	58.	Large	43.0942
36.5854	20	Smali	43.3455	41	Smali	40.7000
46.7596	60	Large	61.9893	153	Large	40.5748
59.5238	78	Smali	40.0183	16	Smali	39.6825
39.1304	45	Large	50.7143^	43	Smali	50.1742
39.2465	39	Large	48.8400	96	Large	54.9451
40.2037	20	Large	34.3407	98	Large	32.3822
38.1563	65	Smali	80.5861	150	Large	51.7130
50.0905	76	Large	33.7163	124	Smali	55.8379
46.9043	48	Smali	60.3792	60	Large	54.9451
43.1894	61	Smali	48.8400	7	Large	70.2786
60.5637	30	Large	38.5579	22	Smali	57.2344
97.6801	70	Large	39.2760	57	Large	54.1126
48.5795	108	Large	47.6564	78	Large	39.8687
67.1551	61	Large	44.6864	36	Large	27.4725
38.7847	10	Smali	45.7875	83	Smali	67.9584
51.8926	68	Large	65.6288	66	Large	44.9317
51.8326	54	Large	33.5775	47	Smali 1	51.5612

97 Smali 228 Smali 27 Large 48 Smali 7 Large 74 Smali 204 Large

24    Large 13 Smali 30 Large 95 Large

104 Large 34 Large 184 Smali 156 Smali

25    Larg^e 43 Smali 36 Large 60 Smali

102 Large