4. (10 PTS) It is believed that vehicle sales are a function of several variable

Question

4. (10 PTS) It is believed that vehicle sales are a function of several variables. The following data have been collected for the past 5 months on sales and these variables. Month 2 Sales 210 258 191 279 245 Adv $ 104 97 75 123 101 Competition Adv $ 63 105 Fuel Price 85 79 71 81 Setup the problem as a multiple regression problem. 109 a. b. The following is available from Excel. Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations ANOVA 0.852972 0.727561 37.32336 MS Regressiorn Residual Total 3 3720.167 1240.056 0.890184 0.633028 1 1393.033 1393.033 5113.2 Standard 95% 95.0% 95.0% P-value Lower 95% tStat Coefficients Error Intercept X Variable 1 X Variable 2 X Variable 3 158.4366 226.2951 0.700133 0.611143 2716.91 3033.788 2716.91 3033.7 2.095206 1.348858 1.553318 0.364142 15.0437 19.23408 15.0437 19.23 -0.56083 1.192579 -0.47026 0.720157 15.714 14.59233 -15.714 14.59 2.808519 -0.37557 0.771281 -36.7404 34.63082 36.7404 34.6 -1.0548 alculate appropriate measures to determine the validity of the multiple regression solution-Discuss what is important to look for when using multiple regression

Explanation / Answer

c. the appropriate measure to determine the validity of the multiple regression output is p-value.

If p-value corresponding to particular variable is less than 0.05, then the multiple regression for that independent variable is valid and explains the variation in the dependent variable.

Here, p-values of all the three variables are greater than 0.05, therefore, these variables are not valid (reliable) dependent variables with a 5 % confidence level.

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