The following model was fitted to explain the selling prices of automobiles in a sample of 106

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The following model was fitted to explain the selling prices of automobiles in a sample of 106 sales:

where
ŷ = selling price of an automobile, in euros
x= the size of the car
x2 = number of seats in the car
x3 = age of car, in years
x4 = dummy variable taking the value 1 if the car has a airbag and 0 otherwise
x= dummy variable taking the value 1 if the car has a sunroof and 0 if it is a convertible
a. Interpret the estimated coefficient of x4.
b. Interpret the estimated coefficient of x5.
c. Find a 95% confidence interval for the impact of an airbag on selling price, all other things being equal.
d. Test the null hypothesis that type of roof has no impact on selling price against the alternative that, all other things equal, cars with sunroofs have a higher selling price than those with a convertible.

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Statistics For Business And Economics

ISBN: 9781292315034

9th Global Edition

Authors: Paul Newbold, William Carlson, Betty Thorne

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