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Exercice

New hire pay: accounting for job levels

The power of linear regression is that it can combine the steps you took earlier in the chapter of testing the difference between groups, then adding a filter, and testing again. By adding the additional variable directly into the regression, you get a significance result that does take the additional information into account.

In this exercise you'll use multiple regression to test the difference in pay between new hires and current employees, while accounting for the fact that the job level mix is not the same in the two groups.

Instructions 1/4

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  • Use lm() to run a multiple linear regression to test whether new hires earn more than current employees, while taking job level into account. Assign the result to model_multiple.