Question: A firm is experiencing theft problems at its warehouse. A consultant to the firm believes that the dollar loss from theft each week (T) depends
A firm is experiencing theft problems at its warehouse. A consultant to the firm believes
that the dollar loss from theft each week (T) depends on the number of security guards
(G) and on the unemployment rate in the county where the warehouse is located
(U measured as a percent). In order to test this hypothesis, the consultant estimated the
regression equation T = a + bG + cU and obtained the following results:
Dependent Variable: T R squared F-ratio P - Value on F
Observations: 27 .7793 42.38 .0001
Variable Parameter Est. Standard Error T-Ratio P-Value
Intercept 5150.43 1740.72 2.96 .0068
G -480.92 130.66 -3.68 .0012
U 211.0 75.0 2.81 .0096
Based on the above information, a one percent increase in the level of unemployment in
the county results in an increase in losses due to theft of ________ more losses per
week.
$280
$460
$75
$211
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