Potential jurors. In Example 27.3 the indicator variable for year ( x2 = 0 for 1998 and x2 = 1 for 2000) was used to combine the two separate regression models from Example 27.1 into one multiple regression model. Suppose that instead of x2 we use an indicator variable x3 that reverses the two years, so that x3 = 1 for 1998 and x3 = 0 for 2000. The mean reporting percent is μy = β0 + β1x1 + β2x3, where x1 is the code for the reporting date (the value on the x axis in Figure 27.1) and x3 is an indicator variable to identify the year (different symbols in Figure 27.1). Statistical software now gives the estimated regression model as

ˆy = 94.9 − 0.717x1 − 17.8x3.

(a) Substitute the two values of the indicator variable into the estimated regression equation to obtain a least-squares line for each year.

(b) How do your estimated regression lines in part

(a) compare with the estimated regression lines provided for each year in Example 27.3?

(c) Will the regression standard error change when this new indicator variable is used? Explain.