?

Econometrics

Free Version

Upgrade subject to access all content

Easy

R-squared Interpretation

EMETRC-YNEZ1L

If the regression model:

$$wage = \beta_{0} + \beta_{1} edu + u$$

...yields an $R^{2}$ of 0.32 when estimated with a random cross-sectional sample of the US population, then

A

variation in years of education explains $68\%$ of the variation in wages.

B

variation in years of education explains $32\%$ of the variation in wages.

C

variation in wages explains $68\%$ of the variation in years of education.

D

variation in wages explains $32\%$ of the variation in years of education.