We have done a multiple regression analysis to see how gender and experience affect salary. We used a dummy variable for gender and then we also added the interaction variable (female work experience).
I am having a hard time interpreting the results. Could someone please help me?
Best Answer
[For simplicity, I'm ignoring values after the decimal]
1) For a hypothetical man with zero years of experience, the salary is 908 units (don't know what the units are here) on average.
2) For a hypothetical woman with zero years of experience, the salary is 908 - 60 = 848 units on average.
3) For every additional year of experience, a man's salary increase by 15 units relative to their baseline of 908 (on average). So the average man with (i) 1 year of experience gets a salary of 908 + 15 = 923 units, and with (ii) 5 years of experience gets a salary of 908 + (15 x 5) = 983 units.
4) For every additional year of experience, a woman's salary increases by 15 - 5 = 10 units relative to their baseline of 848 (on average). This is because the interaction coefficient (-5) tells you that for each additional year of experience, a woman gets 5 units less than a man does for the same additional year of experience. So the average woman with (i) 1 year of experience gets a salary of 848 + 10 = 858 units, and with (ii) 5 years of experience gets a salary of 848 + (10 x 5) = 898 units.