vendor 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Annual Earnings Age y x1 2841 1876 2934 1552 3065 3670 2005 3215 1930 2010 3111 2882 1683 1817 4066

29 21 62 18 40 50 65 44 17 70 20 29 15 14 33

SUMMARY OUTPUT Regression Statistics Multiple R 0.763 R Square 0.582 Adjusted R Square 0.513 Standard Error 547.737 Observations 15.000 ANOVA df Regression Residual Total 2.000 12.000 14.000 SS 5018231.543 3600196.190 8618427.733 MS 2509115.772 300016.349 F 8.363

0.582

Intercept x1 x2

Coefficients Standard Error -20.352 652.745 13.350 7.672 243.714 63.512

t Stat -0.031 1.740 3.837

P-value 0.976 0.107 0.002

Hours Worked per day x2 12 8 10 10 11 11 5 8 8 6 9 9 5 7 12 a.

b.

c.

d./e.

f.

g.

h. Significance F 0.005 i

Lower 95% Upper 95% Lower 95.0% -1442.562 1401.858 -1442.562 -3.365 30.066 -3.365 105.334 382.095 105.334

Upper 95.0% 1401.858 30.066 382.095

j k

2681.0

MLR modle for annual earnings 0 + 1*age + 2* no. of hours worked per day + find least square regression equation using excel Annual earnings = -20.352 + 13.350*age + 243.714*hours worked =-20.352 + 13.350*x1 + 243.714*x2 interpret the estimated and coefficients of each independent variable

b0. the intercept parameter -20.352 is the predicted value of yearly income if x1 = x2 = 0 b1. the age coefficient had a value of 13.35, so this means that for each increase in age by 1 year a vendor's yearly income is b2. the hours worked coefficient had a value of $243.714, so this means that for each increase in hours by 1 hour a vendor' What is the adjusted R^2 and R^2/ W R^2: This means that the independent variable explain about 58.2% variation in the dependent variable Adjusted R^2: this is 51.3% and is only affected by regressors that enhance the predictive power of the regression equation What are the standard errors Age= 13.50 Hours worked = 63.51 If x1 = 35 and x2= 9 find the value of y =-20.352 + 13.35*x1 + 243.714*x2 =-20.352 + 13.35*35 + 243.714*9

Is age (x1) a statistical useful prediction of annual earnings this is a test of H : 1 = 0 versus H1: 1 0. the test statistic is 1.74 that yields a p value of 0.107. hence we fail to reject the n

find the 95% confidence interval for 2 interpret the interval in words of the problem the 95% confidence interval is (105.334, 382.095). We are 95% confident that for each increase in hours worked per day by o coment on the overall fix of the modle (goodness of fit test) comment on the overall adequacy of the model we test H : 1 = 0 and 2 = 0 versus H : at least one of 1 and 2 does not equal to equal to zero

From the Anova table the F-test statistic is 8.363 with p-value 0.005. since the p-value is less than 0.05 we reject the null hypo conclude that the parameters ae jointly statistically significant at significance level 0.05.

endor's yearly income is predicted to increase by 13.35 urs by 1 hour a vendor's yearly income is predicted to increase by $243.714

he regression equation

ce we fail to reject the null hypothesis

rs worked per day by one hour, the vendor's annual income will increase by some value in the interval (105.334, 382.095).

we reject the null hypothesis that the regression parameters are zero at the significant level 0.05

105.334, 382.095).