Problem
The file wages_01.wf1 contains data for monthly wage rates (measured in UK pounds) and IQ scores of a large number of City University graduates, after five years of employment:
(a) Find summary statistics for the above-mentioned variables and discuss them.
(b) Estimate a functional form that will show how a one-point increase in the IQ score will change the respective wage rate by a constant amount measured in UK pounds. What is the change in the wage rate for a ten-point increase in the IQ score?
(c) Estimate a functional form that will show how a one-point increase in the IQ score will have a percentage change effect on the wage rate. What is the percentage change in the wage rate for a ten-point increase in the IQ score?
(d) Use the Box-Cox transformation to decide which of the two models is more appropriate.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.