EthicScan Canada monitors the social, labour, and environmental performance of 1500 companies in Canada, and makes comparisons between companies in the same industry sector. In the food industry, six companies are compared by giving a score for nine factors, including environmental performance (EP), management practices and consumer relations (M&C), and progressive staff policy (PSP). A regression analysis to estimate EP from M&C and PSP produced the following results:

Dependent Variable: EP

R-squared.....................................0.033115
Adjusted R-squared.....................–0.61148
Standard error.............................18.23166
Observations.............................................6

ANOVA

a) Comment on the fact that the adjusted R² is much lower than 1.0.

b) Comment on the fact that the adjusted R² is negative.

c) Is the regression significant at the 95% level overall?

d) Interpret the regression coefficient for PSP, if appropriate.

e) If appropriate, write the regression equation.

f) Comment on the residual plots.

g) How might this regression be improved?

h) An environmental organization claims that progressive staff policies are very important in achieving high environmental performance, since staff are more motivated to contribute to the environmental goals of the company. What ethical issues would be involved in using this regression to confirm this statement?

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MS Significance F df Regression 2 Residual Total 34.15256 17.07628 0.051374 0.950741081 3 997.1808 332.3936 5 1031.33 Cofficients Standard Error t-Stat P-value Intercept 22.89615385 27.5338532 0.831564 0.466657 M&C 0.47 1.740251398 0.270076 0.804615 -0.3992307 1.290274746 -0.30942 PSP 0.777251