Question

For a sample of 500 college professors, the estimated regression equation is given by y= 275-3x-2I + error, where y is retirement age, x is pre-retirement annual income (in $1000s) and I is an indicator variable that takes the value of 0 for male professors and 1 for female professors. Assume that there is a linear relationship between y, x, and I. Which of the following is INCORRECT?

A) For female professors with pre-retirement income of $70,000, the average age of retirement is 63

B) For male professors with pre-retirement income of $70,000, the average age of retirement is 65.

C) The average age of retirement for female professors is 2 years older than male professors

D) For each additional thousand dollars of pre-retirement income, the average age at retirement for male (or female) professors is decreased by 3

Answer 1

Let's review each option until we find the wrong one:

A) TRUE

y=275-31-21

y=275 _ 3 * 70 _ 2 * 1-63

B) TRUE

y=275-31-21

y=275 _ 3 * 70 _ 2 * 0-65

C) FALSE

The average age of retirement for female professors is 2 years older than male professors

The average age is 3 years younger and not older than the male professors.

OPTION C is thus incorrect.

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