The Daleway Corporation owns stores throughout the United States that carry its brand of computer.

The company surveyed 40 recent customers who were considering upgrading and collected
information on the following variables:
PURCHASE, coded as 1 if the customer purchased a computer, 0 if the customer did not.
INCOME, the household income of the customer (in thousands of dollars).
AGE, the age of the customer’s current computer.
OUTPUT shows part of analysis.

Based on OUTPUT, answer the following questions.

a) Name the type of regression model that has been used in this study and why?
b) Write the fitted model obtained from this analysis?
c) Conduct a test of overall model adequacy of the fitted model at α = 0.01.
d) At α = 0.01, test the significant of the independent variable in this model.
e) Interpret the model coefficient for the INCOME.
f) What is the estimated probability that a customer with an income USD 50 (in thousands) and the
age of current computer is 1 years will purchased a new computer?
Solution ::
step: 1 of 10
The MINITAB output for the logistic regression is shown below.

step: 2 of 10
To examine whether the INCOME variable is useful in the logistic regression function we need to
test hypotheses:

step: 3 of 10
The decision rule using a 5% level of significance is

step: 4 of 10
From the output the value of the test statistic for this test is

step: 5 of 10

Since 2.84 > 1.96, we . Therefore, the INCOME variable appears to be useful in the
logistic regression function.

step: 6 of 10
To examine whether the AGE variable is useful in the logistic regression function we need to test
hypotheses:
step: 7 of 10
The decision rule using a 5% level of significance is

step: 8 of 10
From the output the value of the test statistic for this test is

step: 9 of 10

Since 2.36 > 1.96, we . Therefore, the AGE variable appears to be useful in the logistic
regression function.

step: 10 of 10
Thus, both of the variables INCOME and AGE appear to be important in predicting whether the
costumer will purchase a new computer

step: 1 of 10
The MINITAB output for the logistic regression is shown below.

step: 2 of 10
To examine whether the INCOME variable is useful in the logistic regression function we need to
test hypotheses:
step: 3 of 10
The decision rule using a 5% level of significance is

step: 4 of 10
From the output the value of the test statistic for this test is

step: 5 of 10

Since 2.84 > 1.96, we . Therefore, the INCOME variable appears to be useful in the
logistic regression function.

step: 6 of 10
To examine whether the AGE variable is useful in the logistic regression function we need to test
hypotheses:

step: 7 of 10
The decision rule using a 5% level of significance is

step: 8 of 10
From the output the value of the test statistic for this test is

step: 9 of 10

Since 2.36 > 1.96, we . Therefore, the AGE variable appears to be useful in the logistic
regression function.

step: 10 of 10
Thus, both of the variables INCOME and AGE appear to be important in predicting whether the
costumer will purchase a new computer

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