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  • 08a Multiple Regression (I) A

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    Multiple linear regression was used to analyze the relationship between income (dependent variable) and size (independent variable). [1] The coefficient for size was not statistically significant based on its t-value and confidence interval. [2] A partial F-test also showed that removing size from the model did not significantly reduce the explanatory power of the regression. [3] Therefore, size was removed from the multiple regression model.

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    Multiple linear regression was used to analyze the relationship between income (dependent variable) and size (independent variable). [1] The coefficient for size was not statistically significant based on its t-value and confidence interval. [2] A partial F-test also showed that removing size from the model did not significantly reduce the explanatory power of the regression. [3] Therefore, size was removed from the multiple regression model.

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    3 views1 page

    08a Multiple Regression (I) A

    Uploaded by

    ng louis
    Multiple linear regression was used to analyze the relationship between income (dependent variable) and size (independent variable). [1] The coefficient for size was not statistically significant based on its t-value and confidence interval. [2] A partial F-test also showed that removing size from the model did not significantly reduce the explanatory power of the regression. [3] Therefore, size was removed from the multiple regression model.

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    Multiple Regression (I)

    1.
    (a) Yes.
    Coefficient of ‘size’ does not make sense.

    (b) c.v. = ± t(7, 0.025) = ±2.365 => ‘size’ can be removed.

    (c) Test H 0 : β size = 0 (removing ‘size’ does not lead to a significant


    reduction in explanatory power)
    against H1 : β size ≠ 0 (it does)
    SSR(income, size) – SSR(income) = 213.42 – 212.50 = 0.92

    = 0.11 < F (1,7,0.05) = 5.59


    0.92 /1
    =F
    58.58 / 7
    Since reduction in SSR is not significant, H 0 is not rejected.
    t-test for beta(size)= -0.3328 and (-0.3328)^2 = 0.11
    Two-tail test for partial slope = Right-tail partial F test

    2.
    (a) tb1 = 13, tb2 = 12.189
    t(11, 0.025) = 2.201
    Both are significant at the 5% level.

    (b) SSE = 139.410 SST = 3569.344. (b) s.e.e.=sqrt(MSE)


    =sqrt(SSE/(n-k-1))
    (c) CD = 0.957 =3.56
    sd(y)=16.57
    =>var(y)=SST/(n-1)=16.67^2
    (d) 75.62

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