Question: Many factors affect the price of wine including such qualitative

Many factors affect the price of wine, including such qualitative characteristics as the variety of grape, location of winery, and label. Researchers developed a regression model considering two quantitative variables: the tasting score of the wine and the age of the wine (in years) when released to market. They found the following regression equation, with an R2 of 65%, to predict the price (in dollars) of a bottle of wine.
Price = 6.25 + 1.22 Tasting Score + 0.55 Age
One of the following interpretations is correct. Which is it? Explain what’s wrong with the others.
a) Each year a bottle of wine ages, its price increases about $.55.
b) This model fits 65% of the points exactly.
c) For a unit increase in tasting score, the price of a bottle of wine increases about $1.22.
d) After allowing for the age of a bottle of wine, a wine with a one unit higher tasting score can be expected to cost about $1.22 more.

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  • CreatedMay 15, 2015
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