Before running a regression I had to restrict the data to only female and west coast samples to make the regression analysis most relatable to Yessenia. Then I had to consider the variables most relevant to Yessenia, I decided that years of schooling, years of experience, years working for current employer (tenure), and age were the …show more content…
She asked me to consider if a year of school still outweighs experience and tenure considering the presence of ongoing tenure. In order to execute this I considered a similar equation as before but adding in existing tenure (creating a multiplier effect with βtenure) βschooling >βexperience + tenure*βtenure. After evaluating the EViews of hypothesis test of βschooling =βexperience + 3.87*βtenure (using 3.87 because the mean tenure from our sample is 2.87 and you must consider the additional year being forgone), the results conclude that you would fail to reject the null hypothesis, indicating that a year of schooling does not outweigh a year of education and tenure, while considering existing tenure as a multiplier to the coefficient βtenure. Considering my regression and test results I would recommend Yessenia not leave her existing job for a year of schooling, and instead stay at her job where she can accumulate experience and