A random sample of 30 new hardcover textbooks at a college bookstore was used to

Question

A random sample of 30 new hardcover textbooks at a college bookstore was used to estimate the following multiple regression equation: y = 16.65 + 0.04x + 22.12D_1 + 0.43D_2 (5.11) (0.01) (5.60) (5.31) Where Y is the book's price (in dollars), X is the number of pages in the book, D_1 is a dummy variable the equals 1 if it is a natural sciences book and 0 if it is a social sciences or humanities book, and D_2 is a dummy variable that equals 1 if it is a social sciences book and 0 if it is a natural sciences or humanities book; the standard errors are in parenthesis and R^2 = 0.25 a. Which (if any) of the coefficients other than the intercept are statistically significant at the 5% level? b. What does statistically significant at the 5% level' mean? c. Interpret each of the coefficients other than the intercept. Does the magnitude of each seem plausible or implausible? d. Interpret the value of R^2.

Explanation / Answer

a.

Variables which have p-value less than 0.05 would be statistically significant.

b.

This means if a signifance level of 5% is selected, do they fall above or below the selected threshold and if they are good predictors of the model.

c.

x: This states for every increase of 1 in pages of the book, price would go up by 0.04, all other factors remaining constant.

D1: If it is a natural sciences book, price would go up by 22.12, all other factors remaining constant.

D2: If it is a social sciences book, price would go up by 0.43, all other factors remaining constant.

d.

r^2=0.25 which means that 25% of the variation in dependent variable is accounted for by independent variables.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.