Submitted to: Dr.

Jamil Hassan Karami

Bus 173 Section: 25

Submitted By:
Group – 1

Name ID

Mashuqul Alam Ishti 1712093630

Syed A.B.M Affan 1712865630

Abu Horaira Kamal 1330504640

Ahanaf Sadman Reza 1712981630

Shefa-Ul-Alam Chowdhury 1713092630

Date: 30th April 2018

Dr. Jamil Hassan Karami, Lecturer

North South University

Subject: Letter of transmittal

Dear sir,

We feel immense pleasure in presenting to you the project report as part of our
requirement. We found this report to be truly challenging in many aspects.
Writing this report itself was truly comprehensive learning experience.

This report is a reflection of the applied use of statistics that we have across
throughout the whole semester. The main objective of this report is to examine the
effect of education, gender and minority classification on the beginning salary of
the employees in a company.

Thank you for your supportive consideration. Without your inspiration this report
would have been an incomplete one.

Regards

Mashuqul Alam Ishti - 1712093630

Syed A.B.M Affan - 1712865630
Abu Horaira Kamal - 1330504640
Ahanaf Sadman Reza - 1712981630
Shefa-Ul-Alam Chowdhury - 1713092630
 Table of Content

S/L Topic Page

Number
I) Latter of testimonial I

1 Introduction to Data Set and Propose of Project 04

2 Estimated Regression Equation 05

3 Explanation of the estimated regression coefficients 06

(slope) values.
4 The Values of Standard Deviation of Errors, the 07
Coefficient of Multiple Determination

5 Predicted beginning salary for the employee 08

6 Confidence Intervals for the Regression 08 - 10

Coefficients.

7 Discussion and conclusion: 11 - 12

1. Introduction to Data Set and Propose of Project

 Regression model analysis is a statistical method to analysis the relation
among variables. It helps to predict the value of one variables for a given
value of another variable. The core purpose of this project is to apply our
statistical knowledge that we have learned throughout the semester. The
project is mainly on data analysis using multiple regression model using
computer software.

The project case provided data of beginning salary, gender, education level
and minority classification of 100 employees. And the prime concern is to
examine the effect of education, gender and minority classification on the
beginning salary of the employees.

As such, for this research, our null hypothesis is that level of education,
gender and minority classification does not affect the beginning salary of the
employees.

We use the statistical software SPSS to analyze data and show our findings
in different segments of this project report. Among the data, all the variables
are numeric, and among them beginning salary is dependable variable and
rest of them are independent variables.

2. Estimated Regression Equation

 We are estimating the regression model to be
y = A + B1x1 + B2x2 + B3x3 + ε
Here,
Y = Beginning salary ( dependent variable)
X1 = Education level
X2 = Sex of employee
X3 = Minority classification
We are obtaining the data from the columns of SPSS sheet which are named as
beginning salary, sex & race of employee, minority classification and education
level.

Using the SPSS software, we find the following result,

From the output of regression analysis the estimated regression equation is

ŷ = 243.921 + 521.819x1 – 1158.897x2 -853.319x3

3. Explanation of the estimated regression coefficients (slope) values.

Form the portion of the SPSS solution we obtain

a = 243.921, b1= 521.819, b2= -1158.897, b3= -853.319
The estimated regression equation as
ŷ =a +b1x1 + b2x2 + b3x3+ ε
ŷ = 243.921 + 521.819x1 – 1158.897x2 -853.319x3

The value of a = 243.921 in the estimated regression equation gives the value of ŷ
for x1 = 0, x2 = 0 and x3=0.
The value of b1 = 521.819 in the estimated regression model gives the change in y
for a one-unit change in x1 when x2and x3 is held constant. Thus, we can state that
an employee with one extra stage of education level is expected to earn 521.819
dollar more as beginning salary when the value of gender and minority
classification are constant.
The value of b2 = -1158.897 in the estimated regression model gives the change in
y for a one-unit change in x2 when x1and x3is held constant. Thus, we can state that
an employee is expected to earn dollar 1158.897 less beginning salary if the gender
is female, that is when x2=1.
The value of b3 = -853.319 in the estimated regression model gives the change in y
for a one-unit change in x3 when x1and x2 is held constant. Thus, we can state that
an employee is expected to earn dollar 853.319 less if the minority classification is
non-white, that is when x3=1.
4. The Values of Standard Deviation of Errors, the Coefficient of Multiple
Determination

The values of the standard deviation of errors, the coefficient of multiple

determinations, and the adjusted coefficient of multiple determinations are given in
the SPSS result sheet. From this part of the solution,

S (standard deviation of errors) = 1958.140

R square= 45.2%
Adjusted R square= 43.5%
S represents the average distance that the observed values fall from the
regression line. S is 1958.140 which tells us that the average distance of the
data points from the estimated line is about 1958.140
R2 = 45.2 % means, 45.2 % of total beginning salary or y can be explained by
estimated regression line.

5. Predicted beginning salary for the employee

We substitute x1 = 17 and x2 = 0 and x3 = 0 in the estimated regression model.
Thus,
ŷ = 243.921 + 521.819x1 – 1158.897x2 -853.319x3
= 243.921 + 521.819(17) – 1158.897(0) -853.319(0)
= $9114.844

6. Confidence Intervals for the Regression Coefficients.

The values of b1, b2, b3 are respectively population parameters of B1, B2 and B3
which are obtained by estimating model y = A + B1x1 + B2x2 + ε using sample data.
Using these values of sample statistics b1, b2 and b3 we can make confidence
intervals for the corresponding population parameters B1, B2, B3 respectively.
According to the assumptions of regression model, the errors are normally
distributed, the sampling distribution of b1, b2 and b3 is normal with their mean
equal to B1, B2, B3 and standard deviation is equal to σb1, σb2 and σb3. We are using
T distribution as σe is not known and for this we don’t know σb1, σb2 and σb3
respectively.
For 95 % confidence interval for regression
Coefficient B1, B2 and B3 respectively given below from the output of regression
analysis by SPPS,
To make a confidence interval for B1
           b1 = 521.819   and   sb1 = 79.573

The confidence level = 95%.

Area in each tail of the t distribution
                 = (1 - .95) / 2 = .025

n = 100 and k = 3
Degrees of freedom = n - k – 1 = 96

From the t distribution table the value of t for .025 area in the right tail of the t
distribution curve is 1.980
The 95% confidence interval for B1 is

       b1 ± t sb1 = 521.819 ± (1.980)(79.573)

                     = 521.819 ± 157.555
                     = 364.264 to 679.374
95% confidence interval for B1 is 364.264 to 679.374
We can state with 95% confidence that for one extra stage of education level,
beginning salary changes by an amount between 364.264 to 679.374.

To make a confidence interval for B2

           B2 = -1158.897   and   sb2 = 437.871

From the t distribution table the value of t for .025 area in the right tail of the t
distribution curve is 1.980
The 95% confidence interval for B2 is

       b2 ± t sb1 = -1158.897   ± (1.980)( 437.871)

                     = -1158.897± 866.985
                     = -2025.882 to -291.912

95% confidence interval for B2 is -2025.882 to -291.912

We can state with 95% confidence that for a change in gender, beginning salary
changes by an amount between -2025.882 to -291.912
To make a confidence interval for B3
           B3 = -853.319   and   sb3 = 548.171

From the t distribution table the value of t for .025 area in the right tail of the t
distribution curve is 1.980
The 95% confidence interval for B3 is

       b3 ± t sb1 = -853.319± (1.980)( 548.171)

                     = -853.319 ± 1085.379
                     = -1938.698 to 232.06

95% confidence interval for B3 is -1938.698 to 232.06

We can state with 95% confidence that for a change in minority classification,
beginning salary changes by an amount between -1938.698 to 232.06.
 7. Discussion and conclusion:

Level of Education

The P value of the coefficient is .000 or 0% (less than .05). So, we can say that
there is a 95% probability that this variable is having some effect in determining
the dependent variable which in this case is the beginning salary of the employees.
So we reject the Null Hypothesis and can say that this variable is a crucial factor to
the regression model.

Sex of Employee

As we can see from the coefficient table the P value of this variable is 0.010 which
is again less than the significance level of 5%. So, we reject the Null hypothesis
which says the there is no significant effect of Sex of Employees on the Beginning
salary of the employees. So Sex of Employees is a crucial factor to the regression
model.
Minority Classification

The P value of coefficient of this independent variable is 0.123. So, Minority

classification is an important factor in determining the Beginning salary of the
employees as the value of the coefficient is .188 which is higher than .05
significance level. Thus, we do not reject the null hypothesis and can state that
there is no effect of Minority Classification on the Beginning Salary of the
employees.