An advantage of using predicted salary is that measures of managerial quality can be obtained as long as the variables EXP and LPCT are available.
When MQUAL iS replaced by EXP and LPCT, there are no estimated regressors, and the Murphy-Topel (1985) procedure is no longer necessary.
First, as in the model of team performance, MQUAL iS replaced with EXP and LPCT.
The first two columns indicate the impact of EXP and LPCT, the two variables that make Up MQUAL in (2), separately.
Using MQUAL iS equivalent to using EXP and LPCT with restrictions on the latter two variables' coefficients (derived from equation 2).