Recall that the dependent variable (y) is measured as relative error of the effort estimate of a software development task. A total of eight independent variables were evaluated as potential predictors of relative error. Each of these was formulated as a dummy variable, as shown in the table below.
a. The eight independent variables were entered into a stepwise regression, and the following two variables were selected for entry into the model: x1 and x8. Write the main effects model for E(y) as a function of these two variables.
b. The stepwise regression yielded the following prediction equation:
= .12 - .28x1, + .27x8
Give a practical interpretation of the β estimates multiplied by x1 and x8.
c. The researcher is concerned that the sign of 1 in the model is the opposite from what is expected. (The researcher expects a project leader to have a smaller relative error of estimation than a developer.) Give at least one reason why this phenomenon occurred.

For Information: Refer to the Journal of Empirical Software Engineering (Vol. 9, 2004) study of the accuracy of software effort estimates, Exercise 12.73.

Company role of estimator Task complexity: Contract type: Customer importance: Customer priority Xi l if developer, 0 if project x2 = l if Iow,0 if medium/high x4=If high, 0 if low/medium leader l if fixed price, 0 if hourly rate Xc 1 if time of delivery, 0 if cost or quality Level of knowledge: Participation: if high, 0 if low/medium xr = 1 if estimator participates in work, 0 if not Previous accuracy: 1 if more than 20% accurate, 0 if less than 20% accurate x