The file P10_05.xlsx contains salaries for a sample of DataCom employees, along with several variables that might be related to salary. a. Estimate the relationship between Y (Salary) and X (Years Employed) using simple linear regression. (For this problem, ignore the other potential explanatory variables.) Is there evidence to support the hypothesis that the coefficient for the number of years employed is statistically different from zero at the 5% significance level?
b. Estimate a multiple regression model to explain annual salaries of DataCom employees with X and X2 as explanatory variables. Perform relevant hypothesis tests to determine the significance of the regression coefficients of these two variables. Summarize your findings.
c. How do you explain your findings in part b in light of the results found in part a?