Examine the relationship between the average utility bills for homes of a particular size (Y) and the average monthly temperature (X). The data in the file P10_07.xlsx include the average monthly bill and temperature for each month of the past year.
a. Use the given data to estimate a simple linear regression equation. How well does the estimated regression model fit the given data? What does the ANOVA table indicate for this model?
b. Examine the residuals of the regression equation. Do you see evidence of any violations of the regression assumptions?
c. Conduct a Durbin–Watson test on the model’s residuals. Interpret the result of this test.
d. In light of your result in part c, do you recommend modifying the original regression model? If so, how would you revise it?