A Term Paper

On
The Regression analysis of Dataset

Course Name-Business Research Methodology

Course Code- F-510

Submitted to: Mr. Md Mukhlesur Rahaman

Assistant Professor
Department of Finance
Faculty of Business Studies
University of Dhaka

Submitted by: Tamal Ghosh

ID: 38063
Evening MBA

Date of Submission: 7th April 2019

 Letter of Transmittal
7th April, 2019
Mr. Md, Mukhlesur Rahman
Assistant Professor
Department of Finance,
University of Dhaka.

Subject: Submission of Report.

Dear Sir,
I am pleased to submit this report on Regression analysis of Dataset as partial requirement of
the course Business Research Methodology. The assignment has been completed by the
knowledge that I have gathered from the course “Business Research Methodology”.

I am thankful to all those persons who provided me important information and gave me
valuable advices. I would be happy if you read the report carefully and I will be trying to
answer all the questions that you have about the assignment. Thank you for giving me such
an opportunity for working on a topic.

I have tried my label best to complete this assignment meaningfully and correctly, as much as
possible. If you kindly accept the report, then I will be really grateful to you.

Sincerely yours,

……………………
Tamal Ghosh
ID: 38063
Program: MBA (Evening)
Department of Finance
Faculty of Business Studies
University of Dhaka
 Table of Contents

Chapter Content Page No.

1 Introduction 01

2 Literature Review 04

3 Data set 08

4 Data Analysis 21

5 Conclusion 28
 Chapter 1
Introduction

1|Page
Rationale of the study
The reason we are preparing this report is to understand the practical the applications of
business research and to relate with our theoretical learning. Through this report, I was able
to convert our theoretical learning into practical experience by a hands-on experience in the
analysis of a real life scenario. Besides, analysis helps to understand the different applications
in a real scenario. It also helps to find out the key concepts properly.

Objectives of the study

The primary objective of this study is to achieve hand-on experience and knowledge about
the Applications used in Business Research in a real situation. There are some other
objectives also which we are gaining through this study and they are as follows:

 To identify the methods of Business research in a real situation.

 To solve those problems using hypothesis.
 To Relate our theoretical learning with the practical experience
 To be familiar with practical applications
 To understand various concepts.
 To know how to determine the significance of different variables in a model

2|Page
Scope of the study
There were huge scopes to work in the area of the case. Considering the dead line, the scope
and exposure of the paper has been wide-ranging. The report has covered almost all parts and
analysis that enables us to know about the Applications of Business Research.

Limitation of the study

 Time is a major constraint in accumulating all sorts of information in an organized way.

 Large-scale research was not possible due to constraints and restrictions of both time
period and unavailability of data
 The information sources regarding this study are not so much large. It would be more
correct if the study conduct with large information sources.
 Being a hypothetical in nature, the study may produce some unfavorable results which
may not resemble the condition of an actual banking industry.

3|Page
 Chapter 2

Literature Review

4|Page
Literature Review
In statistics, regression analysis is a statistical process for estimating the relationships among
variables. It includes many techniques for modeling and analyzing several variables, when
the focus is on the relationship between a dependent variable and one or more independent
variables. More specifically, regression analysis helps one understand how the typical value
of the dependent variable (or 'criterion variable') changes when any one of the independent
variables is varied, while the other independent variables are held fixed. Most commonly,
regression analysis estimates the conditional expectation of the dependent variable given the
independent variables – that is, the average value of the dependent variable when the
independent variables are fixed. Less commonly, the focus is on a quantile, or other location
parameter of the conditional distribution of the dependent variable given the independent
variables. In all cases, the estimation target is a function of the independent variables called
the regression function. In regression analysis, it is also of interest to characterize the
variation of the dependent variable around the regression function which can be described by
a probability distribution.

Regression analysis is widely used for prediction and forecasting, where its use has
substantial overlap with the field of machine learning. Regression analysis is also used to
understand which among the independent variables are related to the dependent variable, and
to explore the forms of these relationships. In restricted circumstances, regression analysis
can be used to infer causal relationships between the independent and dependent variables.
However, this can lead to illusions or false relationships, so caution is advisable; [ for
example, correlation does not imply causation.

Many techniques for carrying out regression analysis have been developed. Familiar methods
such as linear regression and ordinary least squares regression are parametric, in that the
regression function is defined in terms of a finite number of unknown parameters that are
estimated from the data. Nonparametric regression refers to techniques that allow the
regression function to lie in a specified set of functions, which may be infinite-dimensional.

The performance of regression analysis methods in practice depends on the form of the data
generating process, and how it relates to the regression approach being used. Since the true
form of the data-generating process is generally not known, regression analysis often depends
to some extent on making assumptions about this process. These assumptions are sometimes
testable if a sufficient quantity of data is available. Regression models for prediction are often
5|Page
useful even when the assumptions are moderately violated, although they may not perform
optimally. However, in many applications, especially with small effects or questions of
causality based on observational data, regression methods can give misleading results.

Data collection
The data on which the report is based was provided by our honorable course instructor Md.
Mukhlesur Rahman. The data is cross-sectional.

Based on the given data, the developed equation is:

Wages= α1 + α2 female+α3 Age+α4 edu2 +α5 edu3 +α6 edu4 +α7 Parttime+ut ----------------- (i)

Dependent variable
For analysis and running regression, from the given data the “wage” is the dependent variable
(Y) in the data set. We were asked to take the log of this variable which is a very common
approach to treat skewed data

6|Page
Independent variable
The independent variables in the data set are “Female”, “Age”, “Education” & “Part-time”.
Also from the 1st unrestricted regression it was clear that level of education has an impact on
the wage. Thus the “education” variable was further broken down into 3 dummy variables
were taken, considering Edu, edu2 , edu3 , edu4 for ‘Below Secondary’, ‘Higher Secondary’,
‘Graduation’ and ‘Post-Graduation’ respectively.

Testing the significance of the variables

For testing the significance of the variables, hypothesis was developed and tested through F-
test. Also the output of regressions (Anova table) gave a more or less picture of the
significance of the variables.

Regression
To test the significance of different variables, the data was regressed in Microsoft Excel. The
output- Anova table gave an idea about the nature of the relation between different variables.

7|Page
Chapter 3
Data set

8|Page
Observation Wage Female Age Edu2 Edu3 Edu4 Part-
time
1 66 0 49 0 0 0 1
2 34 1 42 0 0 0 1
3 70 1 42 0 0 0 1
4 47 0 38 0 0 0 0
5 107 1 54 0 0 0 1
6 188 1 54 0 0 0 0
7 123 1 47 0 0 0 0
8 57 1 39 0 0 0 1
9 42 1 25 0 0 0 0
10 200 0 59 0 0 0 0
11 111 0 40 0 0 0 0
12 40 1 28 0 0 0 0
13 185 1 69 0 0 0 1
14 50 1 36 0 0 0 0
15 68 1 29 0 0 0 0
16 98 0 32 0 0 0 0
17 150 1 64 0 0 0 1
18 120 0 48 0 0 0 0
19 71 1 41 0 0 0 1
20 90 1 57 0 0 0 1
21 69 0 35 0 0 0 0
22 111 1 54 0 0 0 0
23 98 0 49 0 0 0 0
24 64 1 31 0 0 0 0
25 75 0 35 0 0 0 0
26 136 1 64 0 0 0 1
27 55 0 24 0 0 0 0
28 87 0 36 0 0 0 0
29 72 1 40 0 0 0 0
30 126 0 54 0 0 0 0
31 70 1 54 0 0 0 1
32 62 0 31 0 0 0 0
33 110 1 60 0 0 0 1
34 97 1 49 0 0 0 1
35 103 0 54 0 0 0 1
36 78 0 41 0 0 0 1
37 91 0 47 0 0 0 0
38 69 1 39 0 0 0 0
39 61 1 30 0 0 0 0
40 88 0 36 0 0 0 0
41 37 1 31 0 0 0 0
42 116 1 53 0 0 0 1

9|Page
43 192 0 49 0 0 0 0
44 70 0 34 0 0 0 0
45 80 0 31 0 0 0 0
46 55 1 43 0 0 0 1
47 97 1 34 0 0 0 0
48 66 0 34 0 0 0 0
49 84 1 49 0 0 0 1
50 65 0 34 0 0 0 0
51 89 0 55 0 0 0 1
52 51 1 22 0 0 0 0
53 94 0 39 0 0 0 0
54 70 1 34 0 0 0 0
55 69 1 37 0 0 0 1
56 68 1 44 0 0 0 1
57 64 0 28 0 0 0 0
58 69 1 27 0 0 0 0
59 73 1 51 0 0 0 1
60 55 1 36 0 0 0 1
61 102 1 39 0 0 0 0
62 65 1 34 0 0 0 0
63 117 0 51 0 0 0 1
64 78 1 28 0 0 0 0
65 38 1 33 0 0 0 1
66 161 0 55 0 0 0 0
67 139 0 42 0 0 0 0
68 83 1 29 0 0 0 0
69 131 1 38 0 0 0 0
70 110 1 47 0 0 0 0
71 71 1 34 0 0 0 0
72 137 0 39 0 0 0 0
73 57 0 27 0 0 0 0
74 39 1 31 0 0 0 0
75 85 0 41 0 0 0 0
76 96 1 49 0 0 0 1
77 132 1 64 0 0 0 1
78 51 1 30 0 0 0 0
79 44 1 44 0 0 0 1
80 77 0 36 0 0 0 0
81 89 0 35 0 0 0 0
82 90 1 45 0 0 0 0
83 97 1 34 0 0 0 0
84 111 1 47 0 0 0 1
85 84 0 60 0 0 0 1
86 106 1 33 0 0 0 0

10 | P a g e
87 114 0 56 0 0 0 1
88 207 1 56 0 0 0 0
89 81 1 48 0 0 0 1
90 54 0 28 0 0 0 0
91 104 1 43 0 0 0 0
92 63 0 29 0 0 0 0
93 70 0 39 0 0 0 0
94 71 1 50 0 0 0 1
95 66 1 31 0 0 0 0
96 60 0 34 0 0 0 0
97 64 0 31 0 0 0 0
98 85 0 43 0 0 0 0
99 79 1 48 0 0 0 1
100 83 0 36 0 0 0 0
101 51 1 32 0 0 0 0
102 57 0 28 0 0 0 0
103 106 1 29 0 0 0 0
104 72 0 30 0 0 0 0
105 163 0 64 0 0 0 1
106 93 0 34 0 0 0 0
107 67 0 35 0 0 0 0
108 62 0 31 0 0 0 0
109 57 1 29 0 0 0 0
110 79 0 34 0 0 0 0
111 77 1 39 0 0 0 1
112 99 0 35 0 0 0 0
113 59 0 31 0 0 0 0
114 57 1 28 0 0 0 0
115 92 0 44 0 0 0 0
116 93 0 44 0 0 0 0
117 117 0 41 0 0 0 0
118 106 0 45 0 0 0 0
119 32 1 31 0 0 0 1
120 65 0 32 0 0 0 0
121 160 0 53 0 0 0 0
122 63 0 24 0 0 0 0
123 81 1 38 0 0 0 0
124 150 1 52 0 0 0 0
125 118 1 62 0 0 0 1
126 98 0 49 0 0 0 1
127 69 1 43 0 0 0 1
128 116 0 57 0 0 0 1
129 72 0 29 0 0 0 0
130 111 1 70 0 0 0 1

11 | P a g e
131 102 0 42 0 0 0 0
132 68 1 32 0 0 0 0
133 139 0 44 0 0 0 0
134 87 1 27 0 0 0 0
135 68 0 46 0 0 0 1
136 168 0 57 0 0 0 0
137 154 0 59 0 0 0 0
138 129 0 45 0 0 0 0
139 55 0 32 0 0 0 0
140 65 1 29 0 0 0 0
141 82 0 39 0 0 0 0
142 154 0 39 0 0 0 0
143 69 1 39 0 0 0 1
144 88 1 44 0 0 0 0
145 113 1 23 0 0 0 0
146 100 0 62 0 0 0 1
147 89 0 33 0 0 0 0
148 87 0 36 0 0 0 0
149 63 1 41 0 0 0 1
150 75 1 27 0 0 0 0
151 64 0 26 0 0 0 0
152 77 0 38 0 0 0 0
153 60 0 35 0 0 0 0
154 76 1 44 0 0 0 1
155 91 0 36 0 0 0 0
156 51 0 39 0 0 0 0
157 64 0 26 0 0 0 0
158 135 0 33 0 0 0 0
159 60 0 34 0 0 0 0
160 55 0 27 0 0 0 0
161 113 1 36 0 0 0 0
162 65 0 27 0 0 0 0
163 206 0 54 0 0 0 0
164 77 0 23 0 0 0 0
165 99 0 54 0 0 0 1
166 60 0 34 0 0 0 0
167 118 1 59 0 0 0 1
168 93 0 51 0 0 0 1
169 117 1 34 0 0 0 0
170 63 0 20 0 0 0 0
171 57 0 36 0 0 0 0
172 87 0 44 0 0 0 0
173 66 0 48 0 0 0 1
174 83 0 51 0 0 0 1

12 | P a g e
175 59 1 34 0 0 0 1
176 64 0 27 0 0 0 0
177 175 0 53 0 0 0 0
178 68 0 56 0 0 0 1
179 108 0 37 0 0 0 0
180 199 0 62 0 0 0 1
181 137 0 31 0 0 0 0
182 46 1 31 0 0 0 0
183 81 0 29 0 0 0 0
184 116 1 55 0 0 0 1
185 153 0 47 0 0 0 0
186 82 1 48 0 0 0 1
187 91 0 30 0 0 0 0
188 101 0 60 0 0 0 1
189 80 1 47 0 0 0 1
190 57 1 32 0 0 0 0
191 62 0 32 0 0 0 0
192 94 0 43 0 0 0 0
193 88 0 32 0 0 0 0
194 95 0 45 0 0 0 0
195 57 0 42 0 0 0 1
196 67 1 41 0 0 0 1
197 161 0 46 1 0 0 0
198 59 1 45 1 0 0 1
199 164 0 46 1 0 0 0
200 104 0 39 1 0 0 0
201 59 1 31 1 0 0 0
202 85 1 49 1 0 0 1
203 111 1 49 1 0 0 1
204 94 1 34 1 0 0 0
205 76 1 49 1 0 0 1
206 87 1 31 1 0 0 0
207 83 1 29 1 0 0 0
208 58 0 34 1 0 0 0
209 195 1 66 1 0 0 1
210 87 0 28 1 0 0 0
211 95 0 34 1 0 0 0
212 79 0 49 1 0 0 1
213 101 1 47 1 0 0 1
214 88 0 26 1 0 0 0
215 98 1 43 1 0 0 1
216 145 0 41 1 0 0 0
217 75 1 35 1 0 0 0
218 59 0 29 1 0 0 0

13 | P a g e
219 120 1 45 1 0 0 0
220 156 0 49 1 0 0 0
221 69 0 36 1 0 0 0
222 77 1 33 1 0 0 0
223 59 0 21 1 0 0 0
224 67 0 32 1 0 0 0
225 99 1 29 1 0 0 0
226 131 1 35 1 0 0 0
227 111 1 36 1 0 0 0
228 129 1 45 1 0 0 1
229 205 0 43 1 0 0 0
230 88 1 34 1 0 0 0
231 96 0 37 1 0 0 0
232 67 0 30 1 0 0 0
233 84 0 43 1 0 0 0
234 99 1 44 1 0 0 1
235 146 0 49 1 0 0 0
236 233 0 70 1 0 0 1
237 43 1 25 1 0 0 0
238 96 0 37 1 0 0 0
239 50 1 27 1 0 0 0
240 116 0 46 1 0 0 0
241 82 1 29 1 0 0 0
242 67 0 36 1 0 0 0
243 160 0 66 1 0 0 1
244 102 0 44 1 0 0 0
245 156 1 39 1 0 0 0
246 38 1 21 1 0 0 0
247 116 0 29 1 0 0 0
248 96 0 34 1 0 0 0
249 83 1 46 1 0 0 1
250 114 0 49 1 0 0 0
251 130 1 45 1 0 0 1
252 100 0 55 1 0 0 1
253 76 1 41 1 0 0 0
254 38 0 28 1 0 0 0
255 66 0 27 1 0 0 0
256 46 1 42 1 0 0 1
257 90 0 31 1 0 0 0
258 70 1 39 1 0 0 1
259 180 0 56 1 0 0 1
260 123 0 39 1 0 0 0
261 84 0 36 1 0 0 0
262 109 0 39 1 0 0 0

14 | P a g e
263 181 1 66 1 0 0 1
264 94 0 22 1 0 0 0
265 107 1 23 1 0 0 0
266 116 0 49 1 0 0 0
267 58 0 35 1 0 0 0
268 159 1 54 1 0 0 0
269 61 1 44 1 0 0 1
270 94 1 36 1 0 0 0
271 61 1 32 1 0 0 1
272 80 1 26 1 0 0 0
273 65 0 33 1 0 0 0
274 134 0 38 1 0 0 0
275 66 0 37 1 0 0 0
276 147 0 49 1 0 0 0
277 106 0 39 1 0 0 0
278 113 0 39 1 0 0 0
279 111 0 27 1 0 0 0
280 93 0 30 1 0 0 0
281 137 0 50 1 0 0 1
282 97 0 30 1 0 0 0
283 77 0 35 1 0 0 0
284 137 1 34 1 0 0 1
285 158 0 49 1 0 0 0
286 109 0 44 1 0 0 0
287 135 0 44 1 0 0 0
288 129 1 35 1 0 0 0
289 84 0 23 1 0 0 0
290 146 0 42 1 0 0 0
291 77 1 30 1 0 0 0
292 96 0 35 1 0 0 0
293 56 1 31 1 0 0 1
294 45 1 25 1 0 0 0
295 76 1 23 1 0 0 0
296 59 0 24 1 0 0 0
297 74 0 28 1 0 0 0
298 54 1 34 1 0 0 1
299 77 0 47 1 0 0 1
300 131 0 44 1 0 0 0
301 95 0 38 1 0 0 0
302 67 0 25 1 0 0 0
303 129 0 65 1 0 0 1
304 119 0 34 1 0 0 0
305 94 0 47 1 0 0 1
306 107 0 46 1 0 0 0

15 | P a g e
307 93 1 29 1 0 0 0
308 81 1 24 1 0 0 0
309 130 1 37 1 0 0 0
310 58 1 27 1 0 0 0
311 102 0 30 1 0 0 0
312 184 1 57 1 0 0 0
313 198 0 67 1 0 0 1
314 118 0 40 1 0 0 1
315 151 0 64 1 0 0 1
316 102 1 50 1 0 0 1
317 67 0 33 1 0 0 0
318 66 1 36 1 0 0 1
319 137 0 57 1 0 0 1
320 107 1 49 1 0 0 1
321 65 1 22 1 0 0 0
322 68 0 30 1 0 0 0
323 90 0 35 1 0 0 0
324 93 1 60 1 0 0 1
325 157 0 42 1 0 0 0
326 88 0 42 1 0 0 1
327 102 1 34 1 0 0 0
328 109 0 42 1 0 0 0
329 77 1 28 1 0 0 0
330 104 1 30 1 0 0 0
331 77 1 25 0 1 0 0
332 121 1 44 0 1 0 1
333 174 0 49 0 1 0 0
334 135 0 39 0 1 0 0
335 70 0 27 0 1 0 0
336 70 1 35 0 1 0 1
337 65 1 39 0 1 0 0
338 240 0 67 0 1 0 1
339 190 1 39 0 1 0 0
340 149 0 56 0 1 0 1
341 114 0 39 0 1 0 0
342 57 1 39 0 1 0 1
343 72 1 45 0 1 0 1
344 154 1 53 0 1 0 0
345 118 0 35 0 1 0 0
346 364 1 59 0 1 0 0
347 104 0 36 0 1 0 0
348 75 1 37 0 1 0 1
349 212 0 50 0 1 0 0
350 172 0 36 0 1 0 0

16 | P a g e
351 182 1 59 0 1 0 1
352 233 0 49 0 1 0 0
353 208 0 46 0 1 0 0
354 81 1 29 0 1 0 0
355 114 0 44 0 1 0 0
356 71 1 39 0 1 0 0
357 190 0 50 0 1 0 1
358 88 0 24 0 1 0 0
359 90 0 21 0 1 0 0
360 184 0 54 0 1 0 0
361 98 0 39 0 1 0 0
362 110 0 33 0 1 0 0
363 109 1 27 0 1 0 0
364 138 0 39 0 1 0 0
365 133 0 52 0 1 0 1
366 116 0 30 0 1 0 0
367 82 0 26 0 1 0 0
368 99 0 32 0 1 0 0
369 160 0 49 0 1 0 1
370 136 0 41 0 1 0 0
371 96 0 35 0 1 0 0
372 70 0 25 0 1 0 0
373 170 0 49 0 1 0 0
374 124 0 43 0 1 0 0
375 101 1 28 0 1 0 0
376 95 0 23 0 1 0 0
377 148 0 49 0 1 0 0
378 156 1 54 0 1 0 1
379 145 1 36 0 1 0 0
380 124 0 42 0 1 0 0
381 145 1 28 0 1 0 0
382 101 1 27 0 1 0 0
383 220 1 46 0 1 0 0
384 90 0 25 0 1 0 0
385 99 0 30 0 1 0 0
386 165 0 50 0 1 0 1
387 129 1 39 0 1 0 0
388 132 1 39 0 1 0 0
389 111 0 34 0 1 0 0
390 107 0 40 0 1 0 0
391 129 0 39 0 1 0 0
392 96 0 42 0 1 0 1
393 117 1 30 0 1 0 0
394 104 0 37 0 1 0 0

17 | P a g e
395 76 0 22 0 1 0 0
396 287 0 54 0 1 0 0
397 146 0 59 0 1 0 1
398 112 0 32 0 1 0 0
399 180 0 41 0 1 0 0
400 102 0 36 0 1 0 0
401 158 0 48 0 1 0 0
402 73 1 25 0 1 0 0
403 164 1 66 0 1 0 1
404 125 0 38 0 1 0 0
405 85 1 27 0 1 0 0
406 143 0 47 0 1 0 1
407 97 0 44 0 1 0 1
408 68 0 28 0 1 0 0
409 89 0 21 0 1 0 0
410 63 0 20 0 1 0 0
411 183 0 44 0 1 0 0
412 134 0 46 0 1 0 0
413 144 0 39 0 1 0 0
414 197 0 59 0 1 0 1
415 70 0 23 0 1 0 0
416 180 0 44 0 1 0 0
417 113 0 32 0 1 0 0
418 65 1 32 0 1 0 1
419 184 0 62 0 1 0 0
420 65 1 24 0 1 0 0
421 206 0 46 0 1 0 0
422 71 0 32 0 1 0 0
423 196 0 32 0 1 0 0
424 215 0 49 0 1 0 1
425 99 1 44 0 1 0 1
426 182 0 44 0 1 0 0
427 140 0 55 0 1 0 1
428 86 0 35 0 1 0 0
429 184 1 51 0 1 0 0
430 166 1 52 0 1 0 1
431 96 0 42 0 1 0 1
432 166 0 49 0 1 0 1
433 60 1 37 0 1 0 1
434 135 0 50 0 1 0 1
435 111 1 38 0 1 0 1
436 207 0 50 0 0 1 1
437 194 0 44 0 0 1 0
438 200 0 44 0 0 1 0

18 | P a g e
439 140 0 27 0 0 1 0
440 186 0 39 0 0 1 0
441 206 0 64 0 0 1 1
442 120 0 35 0 0 1 0
443 148 0 32 0 0 1 0
444 139 1 39 0 0 1 1
445 182 0 24 0 0 1 0
446 182 0 30 0 0 1 0
447 187 1 54 0 0 1 1
448 320 0 59 0 0 1 1
449 182 0 32 0 0 1 0
450 200 0 33 0 0 1 0
451 215 1 62 0 0 1 1
452 205 0 34 0 0 1 0
453 235 0 43 0 0 1 0
454 140 1 37 0 0 1 1
455 214 0 39 0 0 1 0
456 240 0 42 0 0 1 0
457 271 0 34 0 0 1 0
458 238 1 59 0 0 1 0
459 224 1 47 0 0 1 1
460 266 0 68 0 0 1 1
461 144 0 27 0 0 1 0
462 152 0 59 0 0 1 1
463 160 0 36 0 0 1 0
464 210 0 44 0 0 1 0
465 195 0 59 0 0 1 1
466 281 0 54 0 0 1 1
467 169 0 32 0 0 1 0
468 170 0 32 0 0 1 0
469 205 0 47 0 0 1 0
470 127 0 39 0 0 1 0
471 110 0 29 0 0 1 0
472 139 0 35 0 0 1 0
473 154 0 28 0 0 1 0
474 264 0 36 0 0 1 0
475 221 0 60 0 0 1 1
476 123 0 35 0 0 1 0
477 162 0 44 0 0 1 0
478 133 0 40 0 0 1 1
479 206 0 49 0 0 1 1
480 313 0 45 0 0 1 0
481 324 0 46 0 0 1 0
482 250 0 39 0 0 1 0

19 | P a g e
483 168 0 38 0 0 1 0
484 165 0 36 0 0 1 0
485 180 0 36 0 0 1 0
486 264 0 46 0 0 1 0
487 181 0 49 0 0 1 1
488 120 0 27 0 0 1 0
489 180 0 43 0 0 1 0
490 222 0 31 0 0 1 0
491 200 0 34 0 0 1 0
492 148 0 29 0 0 1 0
493 285 0 64 0 0 1 1
494 384 0 49 0 0 1 0
495 128 0 34 0 0 1 0
496 139 0 32 0 0 1 0
497 124 0 33 0 0 1 0
498 173 0 38 0 0 1 0
499 154 0 27 0 0 1 0
500 141 0 29 0 0 1 0

20 | P a g e
 Chapter 4
Data Analysis

21 | P a g e
Main Unrestricted Equation for given Data
Wages= α1 + α2 female+α3 Age+α4 edu2 +α5 edu3 +α6 edu4 +α7 Parttime+ut ----------------- (i)

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.843694592
R Square 0.711820565
Adjusted R Square 0.70831331
Standard Error 29.78869654
Observations 500

ANOVA
df SS MS F Significance F
Regression 6 1080581.344 180096.891 202.9566166 1.0022E-129
Residual 493 437471.6558 887.366442
Total 499 1518053

Coefficients Standard Error
Intercept -41.95490887 6.362758372
Female -0.108088499 3.014828083
Age 3.56920396 0.154907932
Educ2 16.74272057 3.346986771
Educ3 42.35966292 3.624296467
Educ4 101.1272324 4.38519417
Parttime -43.18848448 3.834974959
t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
-6.593824 1.10564E-10 -54.45637716 -29.4534406 -54.4563772 -29.4534406
-0.03585229 0.971414648 -6.031585116 5.815408117 -6.03158512 5.815408117
23.0408083 2.86817E-80 3.264842787 3.873565132 3.264842787 3.873565132
5.00232648 7.89101E-07 10.16660271 23.31883843 10.16660271 23.31883843
11.6876926 5.02268E-28 35.23869042 49.48063542 35.23869042 49.48063542
23.0610615 2.29003E-80 92.5112576 109.7432072 92.5112576 109.7432072
-11.2617383 2.44688E-26 -50.72339545 -35.6535735 -50.7233954 -35.6535735

22 | P a g e
Restricted Equation
Wages= α1 + α2 female+α3 Age+α7 Parttime+ut --------------------------------------------------- (ii)
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.614964883
R Square 0.378181807
Adjusted R Square 0.37442081
Standard Error 43.62488963
Observations 500

ANOVA
df SS MS F Significance F
Regression 3 574100 191366.7 100.5536014 7.39849E-51
Residual 496 943953 1903.131
Total 499 1518053

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept -9.225456895 8.796969 -1.04871 0.294822963 -26.5093737 8.058459911 -26.5093737 8.058459911
Female -17.29262642 4.285979 -4.0347 6.33004E-05 -25.71353822 -8.871714619 -25.71353822 -8.871714619
Age 3.55349228 0.22643 15.69355 2.34088E-45 3.108611773 3.998372787 3.108611773 3.998372787
Parttime -40.57667602 5.613703 -7.22815 1.86224E-12 -51.6062447 -29.54710735 -51.6062447 -29.54710735

To obtain Equation (ii) from (i) we have to put following restrictions.

H0 : α4 =α5 =α6 =0;
Hα : α4 ≠ α5 ≠ α6 ≠0
Now, to assess the acceptability of the restrictions, an appropriate test procedure is needed.
The appropriate test procedure is based on F (q, n-k) distribution.
Rssr −RssU n−k
Fc = × ~F(q,n-k)
RssU q
943953−437471.6558 500−7
Fc = 437471.6558
× 3
= 190.2563662~F(3, 500-7)

FT =2.6049(in case of infinity)

Fc > FT ;
Here, Significant level is assumed to be 5%
Decision: Reject H0 , if and only if Fc > FT . Otherwise do not reject the null hypothesis. H0
is rejected. So, we can say restrictions are not acceptable. Dummy Variables(edu2 , edu3 ,
edu4 ) are important.

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Testing the Significance of Independent Variables
For, 𝐇𝟎 : 𝛂𝟐 =0; 𝐇𝛂 : 𝛂𝟐 ≠0
The required Test Procedure is T-Distribution test.
a2 −α2
𝑇𝐶 = ~ t(n-k); if H0 is true
SE(a2 )
−17.29262642−0
=> t= ~ t(500-7)
4.287959

=> t= -4.0328
Here, Significant level is assumed to be 5%

Decision: Reject, if and only if the calculated test statistic is between -1.972 and +1.972.
Otherwise do not reject the null hypothesis. As, calculated t-statistic does not fall between -
1.972 and +1.972, hence is rejected. That means that Female (𝛼2 ) is a significant variable.

For, 𝐇𝟎 : 𝛂𝟑 =0; 𝐇𝛂 : 𝛂𝟑 ≠0
The required Test Procedure is T-Distribution test.
a3 −α3
𝑇𝐶 = ~ t(n-k); if 𝐻0 is true
SE(a3 )

3.55349228−0
=> t= ~ t(500-7)
0.226430147

=> t= 15.693547
Here, Significant level is assumed to be 5%

Decision: Reject, if and only if the calculated test statistic is between -1.972 and +1.972.
Otherwise do not reject the null hypothesis. As, calculated t-statistic does not fall between -
1.972 and +1.972, hence is rejected. That means that Age (𝛼3 ) is a significant variable.

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 For, 𝐇𝟎 : 𝛂𝟕 =0; 𝐇𝛂 : 𝛂𝟕 ≠0
The required Test Procedure is T-Distribution test.
a7 −α7
TC = ~ t(n-k); if H0 is true
SE(a7 )

−40.57667602−0
=> t= ~ t(500-7)
5.613702597

=> t= -7.228148503
Here, Significant level is assumed to be 5%

Decision: Reject, if and only if the calculated test statistic is between -1.972 and +1.972.
Otherwise do not reject the null hypothesis. As, calculated t-statistic does not fall between -
1.972 and +1.972, hence is rejected. That means that Part-time (𝛼7 ) is a significant variable.

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Correlations between Variables

Wage Female Age Edu2 Edu3 Edu4 Part-

time
Wage 1

Female -0.24337 1

Age 0.504631 -0.00492 1

Edu2 -0.14821 0.071984 -0.06606 1

Edu3 0.149757 -0.05743 -0.00456 -0.3119 1

Edu4 0.554812 -0.22098 0.03316 -0.2339 -0.1993 1

Parttime 0.032655 0.265662 0.58213 -0.0158 -0.0134 -0.0225 1

Relationship between the dependent and Independent Variables

The regression analysis has been done taking Wages as the dependent Variable and Female,
Age, Part-time and Education. For the purpose of explaining the relationship between Wage
and Education, three additional dummy variables are taken.

Coefficients
Intercept -41.95490887

Female -0.108088499

Age 3.56920396

Edu2 16.74272057

Edu3 42.35966292

Edu4 101.1272324

Part-time -43.18848448

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The regression equation using the coefficients
Now, Wages= α1 + α2 female+α3 Age+α4 edu2 +α5 edu3 +α6 edu4 +α7 Parttime+ut ---------- (i)

The regression equation using the coefficients obtained is as follows-

Wages= −𝟒𝟏. 𝟗𝟓 -0.11 female+3.57 Age+𝟏𝟔. 𝟕𝟒 𝐞𝐝𝐮𝟐 +𝟒𝟐. 𝟑𝟔 𝐞𝐝𝐮𝟑 +𝟏𝟎𝟏. 𝟏𝟑𝐞𝐝𝐮𝟒 -43.19
Parttime+ut

Interpretation
The intercept value of -41.95 indicates that the regression equation intersects the y-
axis(Wage) at -41.95 when α2 , α3 , α4 , α5 , α6 , α7 are zero. However, this does not make any
sense in terms of wage as an employee cannot be of zero.
The regression coefficient for Female (𝛂𝟐 ) is -0.108088499. The coefficient is negative and
shows an inverse relationship between wage and female. This indicates that a female
employee gets lower wage than a male employee. A female employee gets Tk. -0.108088499
less than a male employee.
The regression coefficient for Age (𝛂𝟑 ) is 3.56920396. The coefficient is positive and shows
a direct relationship between wage and age. This indicates that an older and senior employee
gets a higher wage than a younger and junior employee. An older employee gets Tk.
3.56920396 more than a younger employee.
The regression coefficient for Education2 (𝛂𝟒 ) is 16.74272057. The coefficient is positive
and shows a direct relationship between wage and Education2. So, Education2 enables an
employee to get Tk. 16.74272057 more than any other individual employee who doesn’t have
Education2.
The regression coefficient for Education3 (𝛂𝟓 ) is 42.35966292. The coefficient is positive
and the relationship between wage and Education3 is direct. So, Education3 enables an
employee to get Tk. 42.35966292 more than any other individual employee who doesn’t have
Education3.
The regression coefficient for Education4 (𝛂𝟔 ) is 101.1272324. The coefficient is positive
and shows a direct relationship between wage and Education4. So, Education4 enables an
employee to get Tk. 101.1272324 more than any other individual employee who doesn’t have
Education4.
The regression coefficient for Part-time (𝛂𝟕 ) is -43.18848448. The coefficient is negative
and shows an inverse relationship between wage and part-time. A part-time employee gets
Tk. -41.95 less than a fulltime employee.
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Chapter 5
Conclusion

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Judgement at a glance....

 Male employees are paid more than Female employees.

 Age have some kind of positive relationship with Wages. Younger employees are
paid lesser amount than older.
 We divided the education on the basis of employee’s education classes. For We
coded Edu, edu2 , edu3 , edu4 for ‘Below Secondary’, ‘Higher Secondary’,
‘Graduation’ and ‘Post-Graduation’ respectively.
 We got positive relationship between wages and education. If employee’s education
level increases, their wages also increase proportionately.
 In the case of Part-time employees, we got negative relationship. Part-time
employees are paid less than the full-time employees

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