1) Bob White is conducting research on monthly expenses for dependent variable i
ID: 1219089 • Letter: 1
Question
1) Bob White is conducting research on monthly expenses for dependent variable is monthly expenses for medical care while his independent and insurance type (government funded, private insurance and other). He care, including over the counter medicine. His variables are number of family members insurance type (govemment funded.,private insurance and other). He has coded insurance type as the following X2-1 if government funded, X3-1 if private insurance Below is his Excel output. Regression Statistics Multiple R R Square AdjustedR Square Standard Eror 952.3605 Observations 0.8590 0.7379 0.7182 Standard Emor952 3605 18 FSignificance F 1.21E-07 ANOVA MS Regression Residual Total 14 17 1.32E+08 43977657 48.48745 12697866 906990.4 1.45B+08 145E+08 Coefficients Standard Error t Stat P-value 1025.911 0.141246 0.889688 1.247247 9.330762 2.19E-07 -13.70 8.786907 1.55916 0.141272 1.166068 7.810781 1.81E-06 44.91 11.63 Intercept X1 X2 X3 -9.11 1 (a) What is the prediction equation? (b) Based on the significance F-test, is this model a good prediction equation? (c) What percent of the variation in medical expenses is explained by the independent variables?Explanation / Answer
a) Prediction equation:
Monthly Expenses = 144.91 + 11.63X1 – 13.70X2 – 9.11X3
b) Based on F-test, this is a good regression model because the F value is very low.
c) 73.79% of the variability is being explained by the equation
d) Monthly expense = 144.91 + 11.63*4 – 9.11
=182.32
e) Monthly expense = 144.91 + 11.63*2 – 13.70
154.47
f) Monthly expense = 144.91 + 11.63*5
203.06
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