Question: Refrigerator prices are affected by characteristics such as whether or not the refrigerator is on sale, whether or not it is listed as a Sub-Zero
Refrigerator prices are affected by characteristics such as whether or not the refrigerator is on sale, whether or not it is listed as a Sub-Zero brand, the number of doors (one door or two doors), and the placement of the freezer compartment (top, side, or bottom). The table below shows the regression output from a regression model using the natural log of price as the dependent variable. The model was developed by the Bureau of Labor Statistics.
| Variable | Coefficient | Standard Error | t Statistic | |||||
| Intercept | 5.4800 | 0.12454 | 44.00 | |||||
| Sale price | 0.0749 | 0.0222 | 3.37 | |||||
| Sub-Zero brand | 1.1350 | 0.1387 | 8.18 | |||||
| Total capacity (in cubic ft) | 0.07689 | 0.00608 | 12.64 | |||||
| Two-door, freezer on bottom | 0.04725 | 0.07467 | 0.63 | |||||
| Two-door, side freezer | Base | |||||||
| Two-door, freezer on top | 0.3753 | 0.03813 | 9.84 | |||||
| One door with freezer | 0.7522 | 0.1288 | 5.84 | |||||
| One door, no freezer | 0.8762 | 0.1362 | 6.43 | |||||
(a) Write the regression model, being careful to exclude the base indicator variable. (Negative amounts should be indicated by a minus sign. Round your answers to 4 decimal places.)
ln(Price) = + SalePrice + Sub-Zero + Capacity + 2DoorFzBot + 2DoorFzTop + 1DoorFz + 1DoorNoFz
(b) Find the p-value for each coefficient, using 314 degrees of freedom. Using an = .05, which predictor variable(s) are not significant predictors? (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 4 decimal places.)
| p-value | |
| SalePrice | |
| Sub-Zero | |
| Capacity | |
| 2DoorFzBot | |
| 2DoorFzTop | |
| 1DoorFz | |
| 1DoorNoFz | |
(c) By how much does the natural log of refrigerator price decrease from a two-door, side freezer model to a two-door, top freezer model? (Round your answer to 4 decimal places.) The natural log of the price decreases by
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
