The file P02_35.xlsx contains data from a survey of 500 randomly selected households.
a. To explain the variation in the size of the Monthly Payment variable, estimate a multiple regression equation that includes the numerical variables Family Size, Total Income (sum of First Income and Second Income), Utilities, and Debt. What do the results in the ANOVA table indicate about this regression?
b. Determine whether the categorical Location and Ownership variables add significantly to explaining Monthly Payment. Do this by using a partial F test, at the 5% significance level, for the group of extra variables that includes Ownership and the dummies corresponding to Location. Do the results depend on which Location dummy is used as the reference category? Experiment to find out.