The issues regarding executive compensation have received extensive…

QuestionAnswered step-by-stepThe issues regarding executive compensation have received extensive…The issues regarding executive compensation have received extensive media attention. Consider a regression model that links CEO compensation (in $ millions) with the total assets of the firm (in $ billions) and the firm’s industry. Dummy variables are used to represent four industries: Manufacturing Technology d1, Manufacturing Other d2, Financial Services d3, and Nonfinancial Services d4. A portion of the data for 455 CEOs is shown in the accompanying table. 1. Estimate the model: y = ?0 + ?1x + ?2d1 + ?3d2 + ?4d3 + ?, where y and x denote compensation (in $ million) and assets (in $ billion), respectively. The nonfinancial services industry is used for reference. 2.At the 5% significance level, can we conclude that compensation is higher in Manufacturing Other than in Manufacturing Technology? Compensation Assets d1 d2 d3 d416.58 20.92 1 0 0 026.92 32.66 1 0 0 011.83 64.79 0 0 1 00.91 0.60 1 0 0 03.44 2.00 1 0 0 010.25 10.22 1 0 0 025.09 46.03 0 0 1 08.12 2.49 0 0 1 014.12 58.08 0 0 1 02.47 6.23 0 1 0 011.57 35.44 0 1 0 07.61 2.16 0 1 0 09.33 8.56 0 1 0 015.38 3.01 0 1 0 010.35 4.31 1 0 0 06.63 3.17 1 0 0 04.89 13.74 0 1 0 023.98 156.81 0 0 1 03.89 2.03 1 0 0 033.99 106.11 0 1 0 011.24 19.41 0 0 1 03.24 18.90 0 1 0 014.22 37.08 0 1 0 029.14 121.14 0 0 1 07.01 23.96 0 0 1 021.23 916.23 0 0 1 07.23 1.96 1 0 0 024.08 31.54 1 0 0 013.43 38.78 0 1 0 09.94 16.47 0 1 0 02.63 0.60 1 0 0 05.28 21.79 0 1 0 05.63 10.15 0 0 1 06.04 12.36 0 0 1 03.31 3.41 0 0 1 02.7 21.97 0 0 1 060.73 208.13 0 1 0 04.51 8.71 0 0 0 14.77 5.52 0 0 1 05.28 4.26 0 1 0 02.24 1.03 1 0 0 064.63 23.88 0 1 0 013.32 5.00 0 1 0 08 8.26 0 1 0 06.29 5.10 0 1 0 02.46 11.91 0 0 1 027.87 1375.77 0 0 1 02.27 10.38 0 0 1 013.63 102.66 0 0 1 08.13 2.27 1 0 0 013.58 13.71 1 0 0 08.44 115.26 0 0 1 05.74 3.60 0 1 0 05.8 3.00 0 1 0 012.2 8.47 1 0 0 010.34 5.55 0 1 0 06.7 17.19 0 0 1 03.59 9.30 0 0 1 08.36 19.54 1 0 0 02.62 2.76 0 0 1 09.8 26.86 1 0 0 09.9 4.31 1 0 0 03.58 4.54 1 0 0 013.37 31.05 0 1 0 04.03 1.51 0 1 0 03.69 1.66 0 1 0 037.44 119.22 0 0 1 04.81 11.10 0 0 1 014.82 49.50 0 1 0 04.65 7.21 0 0 1 028.64 43.27 0 1 0 028.77 2.00 1 0 0 05.19 17.37 0 1 0 06.34 1.93 0 1 0 02.54 7.60 0 1 0 05.33 1.95 0 1 0 015.06 20.27 0 1 0 031.6 129.23 0 1 0 03.52 4.14 0 0 1 04.96 1.40 0 0 1 016.76 49.17 0 0 1 021.01 43.65 0 0 1 03.16 4.51 0 1 0 02.21 16.61 0 0 1 013.9 70.44 0 0 1 025.98 1689.18 0 0 1 09.31 18.80 0 1 0 04.87 15.71 0 1 0 032.34 29.70 0 1 0 05.75 24.36 0 1 0 01.69 1.10 1 0 0 023.26 8.82 0 1 0 01.75 1.00 0 0 0 126 106.90 0 1 0 08.61 55.51 0 0 1 03.61 41.87 0 0 1 09.98 32.50 0 0 1 043.44 135.89 0 1 0 010.28 5.37 0 1 0 04.72 25.77 0 1 0 020.06 21.64 0 1 0 08.62 2.48 1 0 0 010.01 5.30 1 0 0 011.29 12.14 0 1 0 048.13 187.52 0 0 1 02.04 4.57 0 1 0 012.94 5.28 0 0 1 013.77 24.68 0 1 0 02.96 12.48 0 0 1 013.58 7.18 0 1 0 024.02 17.93 0 0 0 15.17 1.91 1 0 0 05.07 3.85 0 1 0 019.61 11.01 1 0 0 011.03 6.91 0 1 0 01.59 1.82 0 1 0 06.14 7.02 0 0 1 012.97 32.67 0 1 0 02.33 2.43 1 0 0 012.47 15.39 0 1 0 07.3 50.96 0 1 0 020.62 9.51 0 1 0 09.07 7.10 0 1 0 016.82 45.76 0 1 0 04.16 1.87 0 1 0 01.55 16.65 0 0 1 012.17 4.10 1 0 0 05.95 3.07 1 0 0 07.33 23.56 0 1 0 012.9 61.71 0 1 0 02.63 6.44 0 0 1 05.43 8.83 0 1 0 09.95 49.15 0 0 1 010.69 32.53 0 1 0 02.99 0.86 1 0 0 09.45 5.95 0 1 0 08.37 14.78 1 0 0 014.13 10.82 1 0 0 015.74 12.64 0 0 0 16.56 4.11 0 1 0 012.74 35.53 0 1 0 04.63 1.24 1 0 0 05.89 29.55 0 1 0 013.64 17.52 1 0 0 020.21 17.68 1 0 0 06.61 2.73 0 1 0 03.18 3.98 0 1 0 014.76 30.97 0 1 0 07.97 8.58 0 1 0 07.08 1.81 0 0 0 13.43 14.59 0 0 1 01.34 2.36 0 0 1 016.43 43.56 0 1 0 05.09 5.30 0 0 0 113.01 213.68 0 1 0 06.93 1.99 1 0 0 03.64 0.85 0 0 1 012.83 5.91 1 0 0 06.11 102.95 0 0 1 02.15 34.36 1 0 0 03.07 37.25 0 0 1 00.98 0.86 0 0 1 012.75 31.52 0 1 0 04.41 6.15 1 0 0 010.75 4.72 0 0 0 110.52 2.29 0 1 0 028.18 274.33 1 0 0 04.41 3.42 0 1 0 010.8 13.94 0 1 0 09.5 34.41 0 1 0 032.11 5.47 0 1 0 08.79 1.37 0 1 0 03.29 1.18 0 0 0 11.36 13.66 0 0 1 08.15 15.98 0 1 0 02.28 4.95 0 1 0 017.12 13.49 1 0 0 014.5 21.04 1 0 0 017.86 685.00 1 0 0 00.24 25.27 0 0 1 010.19 330.23 1 0 0 03.8 0.57 1 0 0 03.84 4.63 0 0 0 122.45 7.04 1 0 0 09.61 3.93 1 0 0 01.05 1.94 0 0 1 015.83 6.68 1 0 0 00.56 14.37 1 0 0 06.6 3.08 0 0 0 13.07 4.09 0 1 0 015.3 15.95 0 1 0 04.34 5.39 1 0 0 014.24 21.40 0 0 0 13.41 3.15 0 1 0 02.79 0.93 0 0 0 117.49 306.05 0 0 1 08.41 3.20 0 1 0 03.7 9.92 0 1 0 02.03 2.98 0 1 0 05.4 2.69 0 1 0 015.01 20.78 0 1 0 06.84 1.82 1 0 0 02.35 1.18 0 1 0 027.7 31.29 1 0 0 00.1 3.54 0 0 1 013.12 10.03 0 0 1 05.33 31.79 0 0 1 05.8 8.48 0 0 1 02.84 34.05 0 0 1 017.03 13.56 0 0 0 14.76 1.46 1 0 0 02.46 0.53 1 0 0 05.39 12.66 0 1 0 03.46 1.26 1 0 0 06.99 1.94 1 0 0 03.97 25.47 0 0 1 018.21 11.95 1 0 0 04.31 6.16 0 1 0 09.81 48.34 1 0 0 01.86 10.65 0 0 1 02.01 2.56 0 1 0 013.73 26.40 0 0 0 17.17 11.90 0 0 0 110.57 7.24 1 0 0 02.91 0.58 0 0 0 114.54 3.58 0 0 1 04.99 3.70 0 1 0 019.9 15.30 0 0 1 00.26 4.37 0 1 0 028.56 64.71 1 0 0 04.02 4.19 0 0 0 139.05 1275.23 0 0 1 06.52 7.78 1 0 0 02.32 4.53 0 1 0 014.35 10.64 0 1 0 012.02 92.73 0 0 1 010.69 16.69 0 1 0 02.89 6.70 0 0 1 00.0001 12.73 0 1 0 06.38 1.89 0 0 0 14.99 3.15 1 0 0 01.33 0.53 0 1 0 09.64 56.60 0 1 0 03.05 0.37 1 0 0 03.69 12.60 1 0 0 021.51 3.94 0 0 0 13.23 3.29 0 1 0 02.23 4.17 0 1 0 010.06 3.09 1 0 0 015.23 23.27 1 0 0 018.13 151.68 0 0 1 09.81 3.32 0 1 0 018.6 27.99 1 0 0 05.04 73.89 0 0 1 03.58 3.51 0 1 0 06.36 2.82 1 0 0 015.06 4.38 0 1 0 02.3 56.11 0 0 1 015.34 3.89 0 1 0 03.67 4.34 0 0 1 017.25 2.37 0 0 0 121.37 29.66 0 1 0 012.6 8.56 0 0 0 18.09 51.22 0 0 1 06.3 0.60 0 1 0 017.29 12.44 0 1 0 05.33 2.86 0 1 0 05.99 4.66 0 1 0 014.29 37.16 0 0 1 012.71 29.48 0 0 0 119.88 6.22 0 0 1 06.16 9.10 0 1 0 09.14 14.42 0 0 1 017.04 102.66 0 0 1 010.24 44.71 1 0 0 091.38 761.16 0 0 1 019.36 504.68 0 0 1 07.21 6.49 0 0 1 02.95 2.21 1 0 0 06.68 11.70 0 1 0 06.25 1.82 0 0 0 18.2 1.48 0 0 0 18.66 6.93 0 1 0 030.8 8.19 0 1 0 00.76 141.29 0 0 1 00.23 0.66 1 0 0 04.93 7.85 0 1 0 06.97 5.26 1 0 0 04.4 4.21 0 1 0 07.58 6.38 0 1 0 02.06 4.24 0 1 0 07.33 4.47 0 1 0 024.44 25.94 0 1 0 08.28 18.56 1 0 0 04.99 11.94 0 1 0 011.01 57.07 0 0 1 021.66 33.11 1 0 0 06.22 2.33 1 0 0 055.63 29.27 0 1 0 011.75 6.33 0 0 0 15.57 6.24 0 0 0 14.77 4.90 0 1 0 013.24 16.86 0 0 0 19.65 9.85 0 1 0 02.45 0.76 0 0 0 17.38 14.91 1 0 0 07.91 2.79 0 1 0 06.04 8.18 0 1 0 07.67 4.35 0 0 0 15.5 11.73 0 1 0 09.38 30.83 0 1 0 07.2 2.60 1 0 0 02.34 1.48 1 0 0 09.8 116.26 1 0 0 07.99 34.44 0 1 0 09.43 12.50 0 1 0 02.11 3.18 0 0 1 07.52 11.39 0 1 0 09.37 9.62 1 0 0 04.63 4.74 0 0 0 11.25 0.87 1 0 0 018.07 96.89 0 0 1 09.15 6.32 0 1 0 02.35 0.78 1 0 0 02.79 1.13 0 1 0 08.89 9.37 0 1 0 04.59 10.80 0 1 0 016.85 135.35 0 0 1 09.86 26.38 0 1 0 05.43 19.19 0 0 1 04.68 14.52 0 0 1 025.75 433.82 0 0 1 09.17 29.19 0 1 0 07.68 8.38 0 0 1 015.69 13.12 0 1 0 09.08 5.48 0 0 0 14.01 4.72 0 1 0 03.53 2.14 0 0 0 15.67 1.90 0 1 0 017.23 24.94 1 0 0 018.43 114.08 0 0 1 03.33 2.69 0 0 0 18.17 16.35 0 1 0 013.04 1.39 0 0 0 18.74 9.62 0 1 0 04.9 6.43 0 0 0 16.14 14.55 0 0 1 07 16.02 0 0 0 19.97 5.04 1 0 0 029.66 15.77 1 0 0 017.53 20.45 0 1 0 06.53 1.47 0 0 0 19.92 4.19 0 1 0 02.1 3.07 0 1 0 01.99 4.94 0 1 0 012.18 29.10 0 1 0 04.52 8.64 0 0 0 17.35 4.68 0 0 0 15.57 8.35 0 1 0 01.93 2.23 1 0 0 03.24 0.64 1 0 0 03.1 21.61 0 0 1 016.63 107.74 0 0 1 08.69 4.70 0 1 0 05.16 2.33 0 1 0 07.85 41.37 0 1 0 01.41 13.73 0 1 0 021.3 99.96 0 1 0 08.15 5.37 0 1 0 05.79 4.82 1 0 0 03.82 13.05 0 0 1 08.45 4.39 0 1 0 06.16 3.74 0 1 0 09.96 10.89 0 0 0 126.76 102.66 0 0 1 06.05 5.43 1 0 0 022.96 10.46 0 1 0 07.57 180.94 0 0 1 09.21 1.68 1 0 0 04.98 29.79 0 0 1 05.1 2.54 0 0 1 04.2 7.27 0 1 0 03.34 3.72 1 0 0 012.37 21.05 0 1 0 09.5 9.18 0 0 0 13 1.79 1 0 0 015.48 4.49 0 1 0 011.72 14.50 1 0 0 023.67 17.02 1 0 0 07.09 2.61 0 0 0 15.63 48.17 0 0 1 011.35 4.21 0 1 0 03.65 14.27 0 0 1 04.2 1.58 0 0 1 016.08 114.24 0 0 1 010.71 12.76 1 0 0 08.21 1.88 1 0 0 022.48 127.73 0 1 0 02.03 14.87 0 0 1 04.47 10.97 0 1 0 06.34 13.97 0 1 0 07.07 3.01 1 0 0 017.94 10.68 1 0 0 010.01 25.69 0 1 0 05.92 214.35 0 0 1 02.42 9.16 0 0 1 08.28 36.07 0 1 0 00.96 1.67 0 1 0 015.55 44.80 0 0 1 06.17 34.08 0 1 0 05.43 5.55 0 1 0 08.64 10.20 0 1 0 03.47 1.55 0 0 0 127.17 46.53 1 0 0 014.48 3.07 0 0 0 14.7 52.35 0 0 1 012.3 5.75 0 1 0 03.02 0.75 0 0 0 19.94 35.28 0 1 0 05.38 12.42 0 0 1 01.7 0.76 1 0 0 01.61 0.94 0 0 0 121.26 178.47 0 1 0 05.92 0.74 1 0 0 03.19 4.61 1 0 0 04.56 15.80 0 0 1 016.02 3.51 0 1 0 023.85 613.94 0 0 1 014.25 344.93 0 0 1 05.6 20.87 0 1 0 04.48 1.52 1 0 0 03.68 3.42 1 0 0 014.03 9.36 0 1 0 03.08 17.47 0 0 1 023.89 51.43 0 0 1 029.85 481.87 0 0 1 04.17 2.75 0 0 0 15.55 2.24 0 0 0 11.97 4.96 0 0 1 01.07 5.33 0 1 0 08.25 11.03 1 0 0 010.34 27.42 0 1 0 02.55 10.70 0 0 1 01.04 4.53 0 1 0 032.85 36.16 1 0 0 011.2 21.73 0 1 0 010.69 21.83 1 0 0 08.85 58.88 0 0 1 052.06 11.37 0 1 0 039.82 11.17 1 0 0 04.48 5.79 0 1 0 012.43 6.08 0 0 0 11.76 0.94 1 0 0 011.99 5.85 1 0 0 02.3 44.88 0 0 1 0MathStatistics and ProbabilityECONOMICS 567Share Question