Develop a scatter plot between annual household spending and annual income. The scatter diagram should include a proper title, a solid trend line, axis titles, and a regression equation, and the Coefficient of Determination (R –square). (1’) Use Excel’s Data Analysis tool to conduct a multiple regression analysis with annual income and household size as independent variables. Choose confidence level at 95%. Using significance level α=0.05. (1’) Please copy and paste the regression analysis output below. Based on the multiple regression analysis output, write the estimated multiple regression equation. Show decimal places to the thousands (e.g. 3.456) (0.5’) Interpret regression coefficients b1 and b2. (1’)
Develop a scatter plot between annual household spending and annual income. The scatter diagram should include a proper title, a solid trend line, axis titles, and a regression equation, and the Coefficient of Determination (R –square). (1’) Use Excel’s Data Analysis tool to conduct a multiple regression analysis with annual income and household size as independent variables. Choose confidence level at 95%. Using significance level α=0.05. (1’) Please copy and paste the regression analysis output below. Based on the multiple regression analysis output, write the estimated multiple regression equation. Show decimal places to the thousands (e.g. 3.456) (0.5’) Interpret regression coefficients b1 and b2. (1’)
Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)
6th Edition
ISBN:9781337111348
Author:Bruce Crauder, Benny Evans, Alan Noell
Publisher:Bruce Crauder, Benny Evans, Alan Noell
Chapter3: Straight Lines And Linear Functions
Section3.3: Modeling Data With Linear Functions
Problem 18E: Tax Table Here are selected entries from the 2014 tax table that show the federal income tax owed by...
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Question
Monthly Household Spending ($) | Annual Household Income ($) | Household Size |
4,016 | 54000 | 3 |
3,159 | 30000 | 2 |
5,100 | 32000 | 4 |
4,742 | 50000 | 5 |
1,864 | 31000 | 2 |
4,070 | 55000 | 2 |
2,731 | 37000 | 1 |
3,348 | 40000 | 2 |
4,764 | 66000 | 4 |
4,110 | 51000 | 3 |
4,208 | 25000 | 3 |
4,219 | 48000 | 4 |
2,477 | 27000 | 1 |
2,514 | 33000 | 2 |
4,214 | 65000 | 3 |
4,965 | 63000 | 4 |
4,412 | 42000 | 6 |
2,448 | 21000 | 2 |
2,995 | 44000 | 1 |
4,171 | 37000 | 5 |
5,678 | 62000 | 6 |
3,623 | 21000 | 3 |
5,301 | 55000 | 7 |
3,020 | 42000 | 2 |
4,828 | 41000 | 7 |
5,573 | 54000 | 6 |
2,583 | 30000 | 1 |
3,866 | 48000 | 2 |
3,586 | 34000 | 5 |
5,037 | 67000 | 4 |
3,605 | 50000 | 2 |
5,345 | 67000 | 5 |
5,370 | 55000 | 6 |
3,890 | 52000 | 2 |
4,705 | 62000 | 3 |
4,157 | 64000 | 2 |
3,579 | 22000 | 3 |
3,890 | 29000 | 4 |
2,972 | 39000 | 2 |
3,121 | 35000 | 1 |
4,183 | 39000 | 4 |
3,730 | 54000 | 3 |
4,127 | 23000 | 6 |
2,921 | 27000 | 2 |
4,603 | 26000 | 7 |
4,273 | 61000 | 2 |
3,067 | 30000 | 2 |
3,074 | 22000 | 4 |
4,820 | 46000 | 5 |
5,149 | 66000 | 4 |
- Develop a scatter plot between annual household spending and annual income. The
scatter diagram should include a proper title, a solid trend line, axis titles, and a regression equation, and the Coefficient of Determination (R –square). (1’)
- Use Excel’s Data Analysis tool to conduct a multiple
regression analysis with annual income and household size as independent variables. Choose confidence level at 95%. Using significance level α=0.05. (1’)
Please copy and paste the regression analysis output below.
- Based on the multiple regression analysis output, write the estimated multiple regression equation.
Show decimal places to the thousands (e.g. 3.456) (0.5’)
- Interpret regression coefficients b1 and b2. (1’)
- (1) Interpret the multiple coefficient of determination r-square. (0.5’)
(2) Compare the r-square of the simple linear model (shown in the scatter plot in Question a) and the r-square of the multiple regression model, what does the differences in r-squares tell us? (0.5’)
- What does F-test for significance tell us? (0.5’)
- What does t-test for significance tell us? (0.5’)
- Can you tell from the 95% confidence intervals whether the two independent variables are statistically significant? Explain. (0.5’)
- If a household has 3 members, and has an annual income of $100,000, predict this household’s monthly spending.
Show decimal places to the thousands (e.g. 3.456) (0.5’)
- Is there any multicollinearity problem in the above regression model? How do you know? (0.5’)
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If a household has 3 members, and has an annual income of $100,000, predict this household’s monthly spending.
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