For the 19 used cars listed in the Used Cars data file on the book€™s website (see also Exercise 13.11), modeling the mean of y = used car price in terms of x₁= age results in r2 = 0.66. Adding x₂= horsepower (HP) to the model yields the results in the following display.

a. Report R² and show how it is determined by SS values in the ANOVA table.
b. Interpret its value as a proportional reduction in prediction error.
c. Interpret its value as the percentage of the variability in the response variable that can be explained.

Transcribed Image Text:

Regression Equation Price = 19349 – 1406 Age + 25.5 HP Coefficients P-Value Term Coef SE Coef T-Value Constant 19349 4053 4.77 0.000 Age -1406 320 -4.40 0.000 25.5 22.3 1.14 НР 0.270 Model Summary R-sq 2084.69 68.69% Analysis of Variance Source MS F-value P-value DF Regression 2 152567500 76283750 17.55 0.000 Error 16 69534753 4345922 Total 18 222102253