Consider again the problem of estimating the costs of drilling oil wells, which was originally discussed in
Question:
y = β0 + β1x1 + β2x2 + β3x3 + β4x4
with the response variable y as the cost and with x1 as the depth, x2 as geology score, x3 as the downtime, and x4 as the rig-index, and make plots of cost against each of the four input variables.
(b) Explain why the variable geology should be removed from the model. Does this surprise you? What is the sample correlation coefficient between cost and geology? What is the sample correlation coefficient between depth and geology? Why do you think that geology is not needed in the model?
(c) Should any other variables be removed from the model? What is the final model that you would recommend for use? (This problem is continued in Problem 13.4.2.)
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Related Book For
Probability And Statistics For Engineers And Scientists
ISBN: 9780495107576
3rd Edition
Authors: Anthony Hayter
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