Exam 17: Multiple Regression

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Life Expectancy An actuary wanted to develop a model to predict how long individuals will live. After consulting a number of physicians, she collected the age at death (y), the average number of hours of exercise per week (x1), the cholesterol level (x2), and the number of points that the individual's blood pressure exceeded the recommended value (x3). A random sample of 40 individuals was selected. The computer output of the multiple regression model is shown below. THE REGRESSION EQUATION IS y = 55.8 + 1.79x1 -0.021x2 - 0.061x3 Life Expectancy An actuary wanted to develop a model to predict how long individuals will live. After consulting a number of physicians, she collected the age at death (y), the average number of hours of exercise per week (x<sub>1</sub>), the cholesterol level (x<sub>2</sub>), and the number of points that the individual's blood pressure exceeded the recommended value (x<sub>3</sub>). A random sample of 40 individuals was selected. The computer output of the multiple regression model is shown below. THE REGRESSION EQUATION IS y = 55.8 + 1.79x<sub>1</sub> -0.021x<sub>2</sub> - 0.061x<sub>3</sub>      ANALYSIS OF VARIANCE    -{Life Expectancy Narrative} Is there enough evidence at the 1% significance level to infer that the average number of hours of exercise per week and the age at death are linearly related? Life Expectancy An actuary wanted to develop a model to predict how long individuals will live. After consulting a number of physicians, she collected the age at death (y), the average number of hours of exercise per week (x<sub>1</sub>), the cholesterol level (x<sub>2</sub>), and the number of points that the individual's blood pressure exceeded the recommended value (x<sub>3</sub>). A random sample of 40 individuals was selected. The computer output of the multiple regression model is shown below. THE REGRESSION EQUATION IS y = 55.8 + 1.79x<sub>1</sub> -0.021x<sub>2</sub> - 0.061x<sub>3</sub>      ANALYSIS OF VARIANCE    -{Life Expectancy Narrative} Is there enough evidence at the 1% significance level to infer that the average number of hours of exercise per week and the age at death are linearly related? ANALYSIS OF VARIANCE Life Expectancy An actuary wanted to develop a model to predict how long individuals will live. After consulting a number of physicians, she collected the age at death (y), the average number of hours of exercise per week (x<sub>1</sub>), the cholesterol level (x<sub>2</sub>), and the number of points that the individual's blood pressure exceeded the recommended value (x<sub>3</sub>). A random sample of 40 individuals was selected. The computer output of the multiple regression model is shown below. THE REGRESSION EQUATION IS y = 55.8 + 1.79x<sub>1</sub> -0.021x<sub>2</sub> - 0.061x<sub>3</sub>      ANALYSIS OF VARIANCE    -{Life Expectancy Narrative} Is there enough evidence at the 1% significance level to infer that the average number of hours of exercise per week and the age at death are linearly related? -{Life Expectancy Narrative} Is there enough evidence at the 1% significance level to infer that the average number of hours of exercise per week and the age at death are linearly related?

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A practical way to identify multicollinearity is through the examination of a correlation ____________________ that shows the correlations of each variable with each of the other variables.

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Multicollinearity is present when there is a high degree of correlation between the dependent variable and any of the independent variables.

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Student's Final Grade: A statistics professor investigated some of the factors that affect an individual student's final grade in her course. She proposed the multiple regression model Student's Final Grade: A statistics professor investigated some of the factors that affect an individual student's final grade in her course. She proposed the multiple regression model   , where y is the final grade (out of 100 points), x<sub>1</sub> is the number of lectures skipped, x<sub>2</sub> is the number of late assignments, and x<sub>3</sub> is the midterm exam score (out of 100). The professor recorded the data for 50 randomly selected students. The computer output is shown below. THE REGRESSION EQUATION IS       ANALYSIS OF VARIANCE    -What is the adjusted coefficient of determination? What does this statistic tell you? , where y is the final grade (out of 100 points), x1 is the number of lectures skipped, x2 is the number of late assignments, and x3 is the midterm exam score (out of 100). The professor recorded the data for 50 randomly selected students. The computer output is shown below. THE REGRESSION EQUATION IS Student's Final Grade: A statistics professor investigated some of the factors that affect an individual student's final grade in her course. She proposed the multiple regression model   , where y is the final grade (out of 100 points), x<sub>1</sub> is the number of lectures skipped, x<sub>2</sub> is the number of late assignments, and x<sub>3</sub> is the midterm exam score (out of 100). The professor recorded the data for 50 randomly selected students. The computer output is shown below. THE REGRESSION EQUATION IS       ANALYSIS OF VARIANCE    -What is the adjusted coefficient of determination? What does this statistic tell you? Student's Final Grade: A statistics professor investigated some of the factors that affect an individual student's final grade in her course. She proposed the multiple regression model   , where y is the final grade (out of 100 points), x<sub>1</sub> is the number of lectures skipped, x<sub>2</sub> is the number of late assignments, and x<sub>3</sub> is the midterm exam score (out of 100). The professor recorded the data for 50 randomly selected students. The computer output is shown below. THE REGRESSION EQUATION IS       ANALYSIS OF VARIANCE    -What is the adjusted coefficient of determination? What does this statistic tell you? Student's Final Grade: A statistics professor investigated some of the factors that affect an individual student's final grade in her course. She proposed the multiple regression model   , where y is the final grade (out of 100 points), x<sub>1</sub> is the number of lectures skipped, x<sub>2</sub> is the number of late assignments, and x<sub>3</sub> is the midterm exam score (out of 100). The professor recorded the data for 50 randomly selected students. The computer output is shown below. THE REGRESSION EQUATION IS       ANALYSIS OF VARIANCE    -What is the adjusted coefficient of determination? What does this statistic tell you? ANALYSIS OF VARIANCE Student's Final Grade: A statistics professor investigated some of the factors that affect an individual student's final grade in her course. She proposed the multiple regression model   , where y is the final grade (out of 100 points), x<sub>1</sub> is the number of lectures skipped, x<sub>2</sub> is the number of late assignments, and x<sub>3</sub> is the midterm exam score (out of 100). The professor recorded the data for 50 randomly selected students. The computer output is shown below. THE REGRESSION EQUATION IS       ANALYSIS OF VARIANCE    -What is the adjusted coefficient of determination? What does this statistic tell you? -What is the adjusted coefficient of determination? What does this statistic tell you?

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We test an individual coefficient in a multiple regression model using a(n) _________ test.

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Identify possible outliers.

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In multiple regression, the standard error of estimate is defined by In multiple regression, the standard error of estimate is defined by   , where n is the sample size and k is the number of independent variables. , where n is the sample size and k is the number of independent variables.

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Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT  Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT    ANOVA      -Which of the following values for the level of significance is the smallest for which at least two explanatory variables are significant individually:  \alpha  = .01, .05, .10, and .15? ANOVA  Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT    ANOVA      -Which of the following values for the level of significance is the smallest for which at least two explanatory variables are significant individually:  \alpha  = .01, .05, .10, and .15?  Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT    ANOVA      -Which of the following values for the level of significance is the smallest for which at least two explanatory variables are significant individually:  \alpha  = .01, .05, .10, and .15? -Which of the following values for the level of significance is the smallest for which at least two explanatory variables are significant individually: α\alpha = .01, .05, .10, and .15?

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One of the consequences of multicollinearity in multiple regression is biased estimates on the slope coefficients.

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Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT    ANOVA      -What are the regression degrees of freedom that are missing from the output? ANOVA Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT    ANOVA      -What are the regression degrees of freedom that are missing from the output? Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT    ANOVA      -What are the regression degrees of freedom that are missing from the output? -What are the regression degrees of freedom that are missing from the output?

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Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT    ANOVA      -What is the predicted house size for an individual earning an annual income of $40,000, having a family size of 4, and having 13 years of education? ANOVA Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT    ANOVA      -What is the predicted house size for an individual earning an annual income of $40,000, having a family size of 4, and having 13 years of education? Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT    ANOVA      -What is the predicted house size for an individual earning an annual income of $40,000, having a family size of 4, and having 13 years of education? -What is the predicted house size for an individual earning an annual income of $40,000, having a family size of 4, and having 13 years of education?

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Multicollinearity is a situation in which two or more of the independent variables are highly correlated with each other.

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A multiple regression model has:

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Life Expectancy An actuary wanted to develop a model to predict how long individuals will live. After consulting a number of physicians, she collected the age at death (y), the average number of hours of exercise per week (x1), the cholesterol level (x2), and the number of points that the individual's blood pressure exceeded the recommended value (x3). A random sample of 40 individuals was selected. The computer output of the multiple regression model is shown below. THE REGRESSION EQUATION IS y = 55.8 + 1.79x1 -0.021x2 - 0.061x3 Life Expectancy An actuary wanted to develop a model to predict how long individuals will live. After consulting a number of physicians, she collected the age at death (y), the average number of hours of exercise per week (x<sub>1</sub>), the cholesterol level (x<sub>2</sub>), and the number of points that the individual's blood pressure exceeded the recommended value (x<sub>3</sub>). A random sample of 40 individuals was selected. The computer output of the multiple regression model is shown below. THE REGRESSION EQUATION IS y = 55.8 + 1.79x<sub>1</sub> -0.021x<sub>2</sub> - 0.061x<sub>3</sub>      ANALYSIS OF VARIANCE    -{Life Expectancy Narrative} Is there enough evidence at the 5% significance level to infer that the model is useful in predicting length of life? Life Expectancy An actuary wanted to develop a model to predict how long individuals will live. After consulting a number of physicians, she collected the age at death (y), the average number of hours of exercise per week (x<sub>1</sub>), the cholesterol level (x<sub>2</sub>), and the number of points that the individual's blood pressure exceeded the recommended value (x<sub>3</sub>). A random sample of 40 individuals was selected. The computer output of the multiple regression model is shown below. THE REGRESSION EQUATION IS y = 55.8 + 1.79x<sub>1</sub> -0.021x<sub>2</sub> - 0.061x<sub>3</sub>      ANALYSIS OF VARIANCE    -{Life Expectancy Narrative} Is there enough evidence at the 5% significance level to infer that the model is useful in predicting length of life? ANALYSIS OF VARIANCE Life Expectancy An actuary wanted to develop a model to predict how long individuals will live. After consulting a number of physicians, she collected the age at death (y), the average number of hours of exercise per week (x<sub>1</sub>), the cholesterol level (x<sub>2</sub>), and the number of points that the individual's blood pressure exceeded the recommended value (x<sub>3</sub>). A random sample of 40 individuals was selected. The computer output of the multiple regression model is shown below. THE REGRESSION EQUATION IS y = 55.8 + 1.79x<sub>1</sub> -0.021x<sub>2</sub> - 0.061x<sub>3</sub>      ANALYSIS OF VARIANCE    -{Life Expectancy Narrative} Is there enough evidence at the 5% significance level to infer that the model is useful in predicting length of life? -{Life Expectancy Narrative} Is there enough evidence at the 5% significance level to infer that the model is useful in predicting length of life?

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The variance of the error variable The variance of the error variable   is required to be constant. When this requirement is violated, the condition is called heteroscedasticity. is required to be constant. When this requirement is violated, the condition is called heteroscedasticity.

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Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT    ANOVA      -What minimum annual income would an individual with a family size of 9 and 10 years of education need to attain a predicted 5,000 square foot home? ANOVA Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT    ANOVA      -What minimum annual income would an individual with a family size of 9 and 10 years of education need to attain a predicted 5,000 square foot home? Real Estate Builder: A real estate builder wishes to determine how house size is influenced by family income, family size, and education of the head of household. House size is measured in hundreds of square feet, income is measured in thousands of dollars, and education is measured in years. A partial computer output is shown below. SUMMARY OUTPUT    ANOVA      -What minimum annual income would an individual with a family size of 9 and 10 years of education need to attain a predicted 5,000 square foot home? -What minimum annual income would an individual with a family size of 9 and 10 years of education need to attain a predicted 5,000 square foot home?

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For the following multiple regression model: For the following multiple regression model:   , a unit increase in x<sub>1</sub>, holding x<sub>2</sub> and x<sub>3</sub> constant, results in: , a unit increase in x1, holding x2 and x3 constant, results in:

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The total variation in y in a regression model will never exceed the regression sum of squares (SSR).

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Use the predicted values and the actual values of y to calculate the residuals.

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In a multiple regression model, the error variable ε\varepsilon is assumed to have a mean of:

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