Multiple regression: Is there evidence for regional variation in wages? I'm stuck with this problem and was wondering if anyone could help explain why it is what it is. Currently I'm doing old exams and there is this question I just can't understand.
The model is the one below and the true/false question I'm having trouble with is.
"There is evidence for regional variation in wages"
How am I suppose to go about regaring a question like this. My thought was that R^2 is not 0 so therefore there must be variation in the model. But it can't be that easy. Explanations would be appreciated.


The $R^2$ checks the whole model. You have experience as well as region, so a large $R^2$ doesn't mean region is important--it might just be experience.
The $F$ statistic at the bottom is an explicit test for whether geography matters if you hold experience constant (i.e. if we compare two equally experienced people, one in each region, would I expect that their wages are different?). The $p$-value for the $F$ statistic is <0.025 (your $\alpha$), therefore there is evidence that wages are different.
