Question

The city building permit agency is concerned about its future workloads. Initially, the agency thinks that it can predict the number of building permits that will be issued next year by simply using the year as the independent variable (1987 is year 1). This regression results in the following:
 = 2,256 + 234.6X
sb = 23.1 Sy|x = 154 r2 = .65
The agency then uses the unemployment rate (percentage of unemployed), rather than the year, as the independent variable to predict building permits. This produces the following:
 = 13,413 - 678X
sb = 21.4 Sy|x = 108 r2 = .78
Interpret each of these regressions. Predict the number of building permits that will be issued in 2015 if unemployment is 7.2%. Which of these equations is the better one from a managerial perspective?


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  • CreatedNovember 11, 2015
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