We stated in the beginning of the chapter that regression can be used to understand the way the world works. That is, you can look at the regression coefficients (their signs and magnitudes) to see the effects of the explanatory variables on the dependent variable. However, is it possible that apparently small changes in the data can lead to very different-looking equations? The file P10_57.xlsx lets you explore this question. Columns K–R contains data on over 100 (fictional) homes that were recently sold. The regression equation for this original data set is given in the range T15:U21. Columns C–I contain slight changes to the original data, with the amount of change determined by the adjustable parameters in row 2. The regression equation for the changed data appears in the range T6:U12. It has been calculated through special matrix functions (not StatTools), so that it changes automatically when the random data change. Experiment by pressing the F9 key or changing the adjustable parameters to see how much the two regression equations can differ. After experimenting, briefly explain how you think housing pricing works—or can you tell?
Answer to relevant QuestionsThe file P02_35.xlsx contains data from a survey of 500 randomly selected households. For this problem, use Monthly Payment as the dependent variable in several regressions, as explained below. a. Beginning with Family Size, ...Do increased taxes increase or decrease economic growth? The file P10_63.xlsx lists tax revenues as a percentage of gross domestic products (GDP) and the average annual percentage growth in GDP per capita for nine countries ...The Bohring Company manufactures a sophisticated radar unit that is used in a fighter aircraft built by Seaways Aircraft. The first 50 units of the radar unit have been completed, and Bohring is preparing to submit a ...A trucking company wants to predict the yearly maintenance expense (Y) for a truck using the number of miles driven during the year (X1) and the age of the truck (X2, in years) at the beginning of the year. The company has ...Using the data given in P10_10.xlsx, estimate a multiple regression equation to predict the price of houses in a given community. Employ all available explanatory variables. Is there evidence of multicollinearity in this ...
Post your question