HINTS a8 imple regression with the cost of ads ag dictions, is 3.989, while for the simp! = a ee | aviakle oniput in Figure 13-7), we have s, ~ 3.849. What we can’t do jg te he hhow sales will change if we increase the number of ads by one, yp ith joie ae iy '¢ by ~ 0.625 (that is, each ad increases total pizza sales ae wvand err ofthis coefficient i 1.12 (that is, about $1,120). Hint: Making inferences about a multiple regression is conceptually 1 ty Dy abou spite ng CX ASSUMPTIONS what we did in Chapter 12 when we made inferences about a TeBressionln “re dealing, wi independent variables, yw [RGAE coPt here we're dealing with two or more ind variables Malticollinearity isa problem you have to deal within multiple re Wann 748 Chapter 13 e. ' BFessiong 5 ing a common-sense understanding of it is necessary. Remempo2™ Soe sa make fairly precise predictions when it’s present. But er that when it’s present, you can’t tell with much precision how much the ton dent variable will change if you “jiggle” one of the independent Variable g our aim should be to minimize multicollinearity. Hint: The best Multiple gression is one that explains the relationship among the data by accountng the largest proportion of the variation in the dependent variable ith toc, numberof independent variables. Warning: Throwing in too many indepeict variables just because you have a computer is not a great idea. OOOO sce cee! SC13-4 Edith Prattisa busy executive in a nationwide trucking company Edis late for a meeting because she has been unable to locate the mule regression output that an associate produced for her. Ifthe total rresze was significant at the 0.05 level, then she wanted to tse the compuizrat putas evidence to support some of her ideas at the meeting. Thesubo nate, however, is sick today and Edith has been unable to locate hs wrk Asa matter of fact, all the information she possesses conceming hens tiple regression is a piece of scrap paper with the following onit Regression for E. Pratt ‘SSR 872.4, with df ‘SSE _ with 17 df ‘SST 1023.6, with 24 df Because the scrap paper doesn’t even have acompletesetofmuste it Edith has concluded that it must be useless. You, howeves Sit know better. Should Edith go directly to the meeting or conte ing for the computer output? ste SC185 _ANew England-based commuter airline has taken a survey of8 54 nals and has obtained the following data for the month of Feb” SALES = total revenue based on numberof tickets sold odours PROMOT = amount spent on promoting the arine in the area(n thousands ‘COMP = numberof competing atlines at that terminal FREE = the percentage of passengers wha lew ree (for vas es0) Multiple Regression and Modeling : ‘a Scanned with CamScannerSales (6) Promonts) Comm ™ vs " 01 46 s 5 162 60 ” ¢ 201 Mm , 6 1460 “2 4 % wy 1 uv s 309 1 ” 2 m9 40 4 ” 1600 40 * 4 3094 a6 5 % 1596 55 " , 163 30 ” 4 205 60 6 9 1072 5.0 10 4 1550 35 19 4 (@) Use the following Minitab output to determine the best-fitting, re gression equation for the airline: The regression equation 16 SALES = 172 + 25.9 PROMOT - 13.2 COMP - 3.04 FHRZ Predictor coef Stdev t-ratio 2 Constant 172.34 51.38 3.35 © 9-006 PROMOT 25.950 4.877 5.32 0.000 COMP. -13.238 3.686 -3.59 0.004 FREE 3.042 2.342 71.300 0.222 (b) Do the passengers who fly free cause sales to decrease significantly? State and test appropriate hypotheses. Use a = 0.05. (© Does an increase in promafions by $1,000 change sales by $24,000, or is the change significanlly different from $28,000? State and test appropriate hypotheses. Use a = 0.10. (@) Give a 90 percent confidence interval for the slope coeffici comp. Mark Lowtown publishes the Mosquito Junction Enquirer and is having, dif- ficulty predicting the amount of newsprint needed each day. He hay ran- domly selected 27 days over the past year and recorded the following, in- formation: POUNDS. = pounds of newsprint for that day's newpaper CLASFIED. = number of classitied advertisernents DISPLAY = number of display advertisements, FULLPAGE = number of ul page advertisements Using Minitab to regress POUNDS on the other three variables, Mark the output that follows. got 13.4 Making Inferences about Population Parameters 749 Scanned with CamScanner