# Question

Lotteries have become important sources of revenue for governments. Many people have criticized lotteries, however, referring to them as a tax on the poor and uneducated. In an examination of the issue, a random sample of 100 adults was asked how much they spend on lottery tickets and was interviewed about various socioeconomic variables. The purpose of this study is to test the following beliefs:

1. Relatively uneducated people spend more on lotteries than do relatively educated people.

2. Older people buy more lottery tickets than younger people.3. People with more children spend more on lotteries than people with fewer children.

4. Relatively poor people spend a greater proportion of their income on lotteries than relatively rich people.

The following data were recorded:

Amount spent on lottery tickets as a percentage of total household income

Number of years of education

Age

Number of children

Personal income (in thousands of dollars)

a. Develop the multiple regression equation.

b. Is the model valid?

c. Test each of the beliefs. What conclusions can you draw?

1. Relatively uneducated people spend more on lotteries than do relatively educated people.

2. Older people buy more lottery tickets than younger people.3. People with more children spend more on lotteries than people with fewer children.

4. Relatively poor people spend a greater proportion of their income on lotteries than relatively rich people.

The following data were recorded:

Amount spent on lottery tickets as a percentage of total household income

Number of years of education

Age

Number of children

Personal income (in thousands of dollars)

a. Develop the multiple regression equation.

b. Is the model valid?

c. Test each of the beliefs. What conclusions can you draw?

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