A study of the top MBA programs attempted to predict the average starting salary (in $1000's) of graduates of the program based on the amount of tuition (in $1000's) charged by the program and the average GMAT score of the program's students. The results of a regression analysis based on a sample of 75 MBA programs is shown below:
Least Squares Linear Regression of Salary
Predictor
Variables Coefficient Std Error T P VIF
Constant
-203.402
51.6573
-3.94
0.0002
0.0
Gmat
0.39412
0.09039
4.36
0.0000
2.0
Tuition
0.92012
0.17875
5.15
0.0000
2.0
R-Squared
0.6857
Resid. Mean Square (MSE)
427.511
Adjusted R-Squared
0.6769
Standard Deviation
20.6763
Interpret the coefficient for the tuition variable shown on the printout.
▸ For every $1000 increase in the tuition charged by the MBA program, we estimate that the average starting salary will increase by $920.12, holding the GMAT score constant
▸ For every $1000 increase in the tuition charged by the MBA program, we estimate that the average starting salary will decrease by $203,402, holding the GMAT score constant.
▸ For every $1000 increase in the tuition charged by the MBA program, we estimate that the average starting salary will increase by $394.12, holding the GMAT score constant
▸ For every $1000 increase in the average starting salary, we estimate that the tuition charged by the MBA program will increase by $920.12.
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