The Times-Observer is a daily newspaper in Metro City. Like many city newspapers, the Times-Observer is suffering through difficult financial times. The circulation manager is studying other newspapers in similar cities in the United States and Canada. She is particularly interested in what variables relate to the number of subscriptions to the newspaper. She is able to obtain the following sample information on 25 newspapers in similar cities.

The following notation is used:

Sub = Number of subscriptions (in thousands)

Popul = The metropolitan population (in thousands)

Adv = The advertising budget of the newspaper (in $ hundreds)

Income = The median family income in the metropolitan area (in $ thousands)

a. Determine the regression equation.
b. Conduct a global test of hypothesis to determine whether any of the regression coefficients are not equal to zero.
c. Conduct a test for the individual coefficients. Would you consider deleting any coefficients?
d. Determine the residuals and plot them against the fitted values. Do you see any problems?
e. Develop a histogram of the residuals. Do you see any problems with the normalityassumption?

Transcribed Image Text:

Paper Sub Popul Adv Income 13795 588.9 132 35.1 2 37.66 585.3 13.2 34.7 3 37.55 566.3 19.8 34.8 23 38.83 629.6 22.0 35.3 24 38.33 680.0 24.2 34.7 25 40.24 651.2 33.0 35.8