Effect Of Law School Ranking On Median Starting Salary

Assignment 1: Effect Of Law School Ranking On Median Starting Salary5380645 Jamyang Choden5480860 JinnipaThaisongsuwan5480885 Chotiwit Sucharitworakul5480976 ChiraphatSrisittiruk

5480979 MathasClements5480994NatnichaJitkla5481097 KornkritJulapatchot

Presented by

The effect of ranking on salaryTo construct appropriate econometrics model to represent the Effect of Law School Ranking on Median Starting Salary, four variables are included in this model to construct an appropriate econometrics model representing Class Size Cost GPA Rank

How the model be constructed?Law school ranking is expected to have positive relationship with median starting salary. According to Forbes article, the graduates from top law schools earn the most starting median pay.How the model be constructed?GPA is included in the model since many evidences suggest that GPA has positive effect on starting salary and the GPA is positively correlated with the ranking of law school. High GPA is one thing that could guarantee the performance of that individual, in this case it is shows the performance of being lawyer. How the model be constructed?Class Size is included in this model because it is estimated to have an impact on salary indirectly. We first assume that class size has a negative relationship with salary. According to Krueger, small-size class has less distraction, which affects student achievement performance directly. With this advantage, we predict company is willing to hire and also pay ones who study in small sized class.

How the model be constructed?Cost is the last variable that we include in the model. We believe that the law school cost can affect the quality of the education, but the point is that as an employee, they paid a lot for their education, so they could expect their salaries to be comparable or reasonable with their cost. THE MULTIPLE REGRESSION MODELlogSalary=0+1Rank+2GPA+3ClassSize+4Cost

The model should be as follow:REGRESSION RESULTlogSalary=9.454807-.0036789rank+0.3792975GPA+0.0002201clsize+5.68e-06cost

Regression analysis of each variableRankp-value is 0.000 which claims that this variable is significant.Negative RelationshipIf the rank is decrease by one, the salary will increase by 0.00367%.

Regression analysis of each variableGPAp-value is 0.000 which claims that this variable is significant.Positive RelationshipIf the GPA is increase by one unit, the salary will increase by 0.379297%.

Regression analysis of each variableClass sizep-value is 0.0019 which claims that this variable is significant.Positive RelationshipIf the class size is increase by one person, the salary will increase by 0.0002201%.

Regression analysis of each variableCostp-value is 0.046 which claims that this variable is significant.Negative RelationshipIf the rank is decrease by one unit, the salary will increase by 0.000574%.