City Hospital would like to develop a regression model to predict the total hospital bill for a patient based on his or her length of stay, number of days in the hospital’s intensive care unit (ICU), and age of the patient. Data for these variables can be found in the Excel file City Hospital.xlsx.
a. Using PHStat, check for the presence of multicollinearity.
b. If multicollinearity is present, take the necessary steps to eliminate it.
c. Perform a general stepwise regression using α = 0.05 for the p value to enter and to remove independent variables from the regression model.
d. Identify the regression equation for the model in part c.
e. Perform a residual analysis with the model in part c to verify that the conditions for the model are met.