We assume that our wages will increase aswe gain experience and become more valuable to

Chapter 0, Problem 28.42

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We assume that our wages will increase aswe gain experience and become more valuable to our employers. Wages alsoincrease because of inflation. By examining a sample of employees at a givenpoint in time, we can look at part of the picture. How does length of service(LOS) relate to wages? Table 28.10 gives data on the LOS in months and wagesfor 60 women who work in Indiana banks. Wages are yearly total income dividedby the number of weeks worked. We have multiplied wages by a constant forreasons of confidentiality. 11(a) Plot wages versus LOS using different symbols for size of the bank. There isone woman with relatively high wages for her length of service. Circle this pointand do not use it in the rest of this exercise. (b) Would you be willing to use a multiple regression model with parallel slopesto predict wages from LOS for the two different bank sizes? Explain.(c) Fit a model that will allow you to test the hypothesis that the slope of theregression line for small banks is equal to the slope of the regression line for largebanks. Conduct the test for equal slopes.(d) Are the conditions for inference met for your model in part (c)? Constructappropriate residual plots and comment.