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. reg price mpg headroom trunk weight length gear, ratio Source I df MS Number o

ID: 3041717 • Letter: #

Question

. reg price mpg headroom trunk weight length gear, ratio Source I df MS Number of obs F (6, 67) 740 7.79 0.0000 -0.4108 Adj R-squared 0.3581 2363.2 Model 1 260900993 Residual 374164403 6 43483498.9 Prob >F 67 5584543.32 R-squared Root MSE price l Coef. Std. Err P31tl [95% Conf. Interval ] mpg 1 -89.62706 82,21638 1.09 0.280 253.7316 74.47752 headroom 1-689.1966 437.4574 1.58 0.120 1562.365 183.9721 trunk 115.206 108.102 1.07 0.290-100.5665 330.9785 weight I 5.376064 1.25863 4.27 0.000 2.863828 7.888301 length 1 -116.8499 42.11482 2.77 0.007 200.9114 -32.78831 gear_ratio 1720.897 937.8185 1.84 0.071150.9964 3592.791 cons 9090.94 6892.225 1.32 0.192 4665.999 22847.88 For which variables will you reject the null with at least 95% confidence? Circle Three reasons why: (1) What does p-value on headroom tell us?

Explanation / Answer

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We will do it for variables with less than .05 p-value.Check the 6th column:

1.

weight
length
gear-ratio (borderline case)
2.
Reasons:

1.
the overall significance of the regression is less than .05, indicating a statistically significant relation between the dependent and independent variables. therefore, some variables have significant predictive power

2.
The 95% confidence interval doesn't have 0 in them , indicating statistical significance

3.
the individual level p-value is less than .05 for these variables is still less or almost equal to .05 indicating statistical significance. Below is the p-value of the statistically significant variables:

weight has a p-value of 0.000
length has a p-value of 0.007
gear-ratio has a borderline p-value of 0.071 and hence can be considered significant

3. The p-value on headroom is more than .05 at .12. which means that the headroom is not a significant variable.
it is not a significant predicter of the dependent variable Price