Exam 17: Multiple Regression

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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      -Suppose the builder wants to test whether the coefficient on income is significantly different from 0. What is the value of the relevant t-statistic? 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      -Suppose the builder wants to test whether the coefficient on income is significantly different from 0. What is the value of the relevant t-statistic? 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      -Suppose the builder wants to test whether the coefficient on income is significantly different from 0. What is the value of the relevant t-statistic? -Suppose the builder wants to test whether the coefficient on income is significantly different from 0. What is the value of the relevant t-statistic?

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The coefficient of determination ____________________ for degrees of freedom takes into account the sample size and the number of independent variables when assessing model fit.

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When the error variable does not have constant variance, this condition is called ____________________.

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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 the regression model as a whole is significant:  \alpha  = .00005, .001, .01, and .05? 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 the regression model as a whole is significant:  \alpha  = .00005, .001, .01, and .05?  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 the regression model as a whole is significant:  \alpha  = .00005, .001, .01, and .05? -Which of the following values for the level of significance is the smallest for which the regression model as a whole is significant: α\alpha = .00005, .001, .01, and .05?

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For a multiple regression model the following statistics are given: Total variation in y = 250, SSE = 50, k = 4, and n = 20. Then, the coefficient of determination adjusted for the degrees of freedom is:

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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 independent variables in the model are significant at the 2% level? 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 independent variables in the model are significant at the 2% level? 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 independent variables in the model are significant at the 2% level? -Which of the independent variables in the model are significant at the 2% level?

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A multiple regression model has the form A multiple regression model has the form   . As x<sub>3</sub> increases by one unit, with x<sub>1</sub> and x<sub>2</sub> held constant, the y on average is expected to: . As x3 increases by one unit, with x1 and x2 held constant, the y on average is expected to:

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A high value of the coefficient of determination significantly above 0 in multiple regression, accompanied by insignificant t-statistics on all parameter estimates, very often indicates a high correlation between independent variables in the model.

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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} Interpret the coefficient b<sub>3</sub>. 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} Interpret the coefficient b<sub>3</sub>. 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} Interpret the coefficient b<sub>3</sub>. -{Life Expectancy Narrative} Interpret the coefficient b3.

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The coefficient of determination ranges from:

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In reference to the equation In reference to the equation   , the value -0.80 is the y-intercept. , the value -0.80 is the y-intercept.

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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    -Does this data provide enough evidence to conclude at the 5% significance level that the final grade and the number of skipped lectures are linearly related? , 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    -Does this data provide enough evidence to conclude at the 5% significance level that the final grade and the number of skipped lectures are linearly related? 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    -Does this data provide enough evidence to conclude at the 5% significance level that the final grade and the number of skipped lectures are linearly related? 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    -Does this data provide enough evidence to conclude at the 5% significance level that the final grade and the number of skipped lectures are linearly related? 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    -Does this data provide enough evidence to conclude at the 5% significance level that the final grade and the number of skipped lectures are linearly related? -Does this data provide enough evidence to conclude at the 5% significance level that the final grade and the number of skipped lectures are linearly related?

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In order to test the significance of a multiple regression model involving 4 independent variables and 25 observations, the numerator and denominator degrees of freedom for the critical value of F are 3 and 21, respectively.

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

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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      -When the builder used a simple linear regression model with house size as the dependent variable and education as the independent variable, he obtained an R-square value of 23.0%. What additional percentage of the total variation in house size has been explained by including family size and income in the multiple regression? 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      -When the builder used a simple linear regression model with house size as the dependent variable and education as the independent variable, he obtained an R-square value of 23.0%. What additional percentage of the total variation in house size has been explained by including family size and income in the multiple regression? 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      -When the builder used a simple linear regression model with house size as the dependent variable and education as the independent variable, he obtained an R-square value of 23.0%. What additional percentage of the total variation in house size has been explained by including family size and income in the multiple regression? -When the builder used a simple linear regression model with house size as the dependent variable and education as the independent variable, he obtained an R-square value of 23.0%. What additional percentage of the total variation in house size has been explained by including family size and income in the multiple regression?

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Multicollinearity will result in excessively low standard errors of the parameter estimates reported in the regression output.

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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 cholesterol level and the age at death are negatively 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 5% significance level to infer that the cholesterol level and the age at death are negatively 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 5% significance level to infer that the cholesterol level and the age at death are negatively linearly related? -{Life Expectancy Narrative} Is there enough evidence at the 5% significance level to infer that the cholesterol level and the age at death are negatively linearly related?

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Multiple regression has four requirements for the error variable. One is that the probability distribution of the error variable is ____________________.

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Some of the requirements for the error variable in a multiple regression model are that the probability distribution is ____________________ with a mean of ____________________.

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In a multiple regression analysis, if the model provides a poor fit, this indicates that:

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