It is believed that, the average numbers of hours spent studying per day

(HOURS) during undergraduate education should have a positive linear

relationship with the starting salary (SALARY, measured in thousands of
dollars per month) after graduation. Given below is the Excel output for
predicting starting salary (Y) using number of hours spent studying per day
(X) for a sample of 51 students.

1) What is the estimated change in mean salary (in thousands of dollars) as

a result of spending an extra hour per day studying?
2) What is the error sum of squares (SSE) of the above regression?
3) What is the value of the estimated variance for the simple regression
model?

1) What is the estimated change in mean salary (in thousands of dollars) as

a result of spending an extra hour per day studying?
Y = β0 + β 1 X

When X has 1 extra (X + 1), Y will change β 1 (in thousands of dollar)

β 1=0.9795

Y = B0 + B1(X+1) = B0 + B1X + B1
2) What is the error sum of squares (SSE) of the above regression?

SST = SSR + SSE  SSE = SST – SSR = 427.0798 – 335.0472 = 92.0326

3) What is the value of the estimated variance for the simple regression
model?

2 SSE 92.0326
σ = = =1.8782
n−2 51−2