The database Airfares.xlsx contains information on the air- fare on 638 routes in the United States. In

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Question:

The database Airfares.xlsx contains information on the air- fare on 638 routes in the United States. In addition, it contains data on the length of the route, the average income in the starting and ending cities, whether Southwest Airlines flies on the route, and other variables. The goal is to create a Multiple Linear Regression model which predicts the airfare along a given route. The datafile named Airfares HW4 datafile is shared with you

a. Develop an estimated multiple regression equation which predicts the airfare along a given route.

b. Which variables are significant? Do you prefer to add all the independent variables to the model?

c. Interpret the R2 (R-squared).

d. Interpret the results and please add your comments on the fitting of your model?

S_CODE	S_CITY	E_CODE	E_CITY	COUPON	NEW	VACATION	SW	HI	S_INCOME	E_INCOME	S_POP	E_POP	SLOT	GATE	DISTANCE	PAX	FARE
*	Dallas/Fort Worth TX	*	Amarillo TX	1.00	3	No	Yes	5291.99	$28,637	$21,112	3036732	205711	Free	Free	312	7864	$64.11
*	Atlanta GA	*	Baltimore/Wash Intl MD	1.06	3	No	No	5419.16	$26,993	$29,838	3532657	7145897	Free	Free	576	8820	$174.47
*	Boston MA	*	Baltimore/Wash Intl MD	1.06	3	No	No	9185.28	$30,124	$29,838	5787293	7145897	Free	Free	364	6452	$207.76
ORD	Chicago IL	*	Baltimore/Wash Intl MD	1.06	3	No	Yes	2657.35	$29,260	$29,838	7830332	7145897	Controlled	Free	612	25144	$85.47
MDW	Chicago IL	*	Baltimore/Wash Intl MD	1.06	3	No	Yes	2657.35	$29,260	$29,838	7830332	7145897	Free	Free	612	25144	$85.47
*	Cleveland OH	*	Baltimore/Wash Intl MD	1.01	3	No	Yes	3408.11	$26,046	$29,838	2230955	7145897	Free	Free	309	13386	$56.76
*	Dallas/Fort Worth TX	*	Baltimore/Wash Intl MD	1.28	3	No	No	6754.48	$28,637	$29,838	3036732	7145897	Free	Free	1220	4625	$228.00
*	Fort Lauderdale FL	*	Baltimore/Wash Intl MD	1.15	3	Yes	Yes	5584.00	$26,752	$29,838	1440377	7145897	Free	Free	921	5512	$116.54
*	Houston TX	*	Baltimore/Wash Intl MD	1.33	3	No	Yes	4662.44	$27,211	$29,838	3770125	7145897	Free	Free	1249	7811	$172.63
*	Kansas City MO	*	Baltimore/Wash Intl MD	1.60	2	No	Yes	2617.00	$25,450	$29,838	1694803	7145897	Free	Free	964	4657	$114.76
*	Las Vegas NV	*	Baltimore/Wash Intl MD	1.57	3	Yes	Yes	1772.59	$24,575	$29,838	1197234	7145897	Free	Free	2104	4489	$158.20
*	Los Angeles CA	*	Baltimore/Wash Intl MD	1.50	1	No	Yes	3932.29	$24,706	$29,838	9056076	7145897	Free	Free	2329	7349	$228.99
*	Nashville TN	*	Baltimore/Wash Intl MD	1.12	3	No	Yes	4471.62	$25,995	$29,838	1115048	7145897	Free	Free	587	5654	$79.17
*	New Orleans LA	*	Baltimore/Wash Intl MD	1.29	3	No	Yes	4356.12	$22,038	$29,838	1308499	7145897	Free	Free	992	3525	$132.05
JFK	New York/Newark NY	*	Baltimore/Wash Intl MD	1.00	3	No	No	2626.90	$32,991	$29,838	8621121	7145897	Controlled	Free	181	7171	$117.23
LGA	New York/Newark NY	*	Baltimore/Wash Intl MD	1.00	3	No	No	2626.90	$32,991	$29,838	8621121	7145897	Controlled	Free	181	7171	$117.23
EWR	New York/Newark NY	*	Baltimore/Wash Intl MD	1.00	3	No	No	2626.90	$32,991	$29,838	8621121	7145897	Free	Constrained	181	7171	$117.23
*	Orlando FL	*	Baltimore/Wash Intl MD	1.13	3	Yes	Yes	5706.76	$22,360	$29,838	1421287	7145897	Free	Free	788	11013	$106.11
*	Phoenix AZ	*	Baltimore/Wash Intl MD	1.86	3	No	Yes	1230.48	$23,025	$29,838	2753373	7145897	Free	Free	2001	4408	$181.16
*	Salt Lake City UT	*	Baltimore/Wash Intl MD	1.93	3	No	Yes	2000.67	$21,121	$29,838	1228816	7145897	Free	Free	1866	2767	$157.50
*	San Diego CA	*	Baltimore/Wash Intl MD	1.87	3	No	Yes	1572.93	$23,903	$29,838	2673620	7145897	Free	Free	2290	3170	$200.20
*	San Francisco CA	*	Baltimore/Wash Intl MD	1.52	3	No	No	2967.59	$38,813	$29,838	1653017	7145897	Free	Free	2454	6417	$246.85
*	St Louis MO	*	Baltimore/Wash Intl MD	1.14	3	No	Yes	4191.24	$25,824	$29,838	2549844	7145897	Free	Free	729	10264	$99.70
*	Tampa FL	*	Baltimore/Wash Intl MD	1.13	3	Yes	Yes	5201.34	$23,654	$29,838	2195215	7145897	Free	Free	846	7082	$106.77
ORD	Chicago IL	*	Birmingham AL	1.16	3	No	Yes	3627.46	$29,260	$23,858	7830332	895414	Controlled	Free	576	4138	$113.50
MDW	Chicago IL	*	Birmingham AL	1.16	3	No	Yes	3627.46	$29,260	$23,858	7830332	895414	Free	Free	576	4138	$113.50
*	Seattle/Tacoma WA	*	Boise ID	1.07	3	No	Yes	5255.24	$30,916	$23,901	2230831	372606	Free	Free	403	5995	$69.12
*	Atlanta GA	*	Boston MA	1.25	3	No	No	5736.34	$26,993	$30,124	3532657	5787293	Free	Free	939	14005	$210.00
JFK	New York/Newark NY	*	Buffalo NY	1.01	3	No	No	4040.09	$32,991	$23,184	8621121	1173217	Controlled	Free	291	12432	$134.30

1. S_CODE: starting airport’s code
2. S_CITY: starting city
3. E_CODE: ending airport’s code
4. E_CITY: ending city
5. COUPON: average number of coupons (a one-coupon flight is a non-stop flight, a two-coupon flight is a one stop flight, etc.) for that route
6. NEW: number of new carriers entering that route between Q3-96 and Q2-97
7. VACATION: whether a vacation route (Yes) or not (No); Florida and Las Vegas routes are generally considered vacation routes
8. SW: whether Southwest Airlines serves that route (Yes) or not (No)
9. HI: Herfindel Index – measure of market concentration (refer to BMGT 681)
10. S_INCOME: starting city’s average personal income
11. E_INCOME: ending city’s average personal income
12. S_POP: starting city’s population
13. E_POP: ending city’s population
14. SLOT: whether either endpoint airport is slot controlled or not; this is a measure of airport congestion
15. GATE: whether either endpoint airport has gate constraints or not; this is another measure of airport congestion
16. DISTANCE: distance between two endpoint airports in miles
17. PAX: number of passengers on that route during period of data collection
18. FARE: average fare on that route