business analytics

SYED MOIZZ ALI KAZMI

2022432108
Model 1 - Simple Regression:

Coefficients:

 Intercept (const): The estimated intercept is 5.9786. It represents the estimated value of the
dependent variable (Price_in_Thousands) when the independent variable (Fuel_Efficiency) is
zero.

 Fuel Efficiency: The coefficient for Fuel Efficiency is 0.9705. It indicates that for each unit
increase in Fuel Efficiency, the Price_in_Thousands is expected to increase by 0.9705 units.

Model Fit:

 R-squared: The R-squared value is 0.995, suggesting that 99.5% of the variability in the
dependent variable is explained by the model.

Statistical Significance:

 F-statistic: The F-statistic is 629.0 with a p-value of 0.000139. This indicates that the overall
model is statistically significant.

 P-value (Fuel_Efficiency): The p-value for Fuel_Efficiency is 0.000, indicating that it is statistically
significant.

Practical Significance:

 The coefficient for Fuel_Efficiency (0.9705) suggests a strong positive relationship. However,
practical significance depends on the context of the problem and the units of the variables.

Model 2 - Multiple Regression:

Coefficients:

 Intercept (const): The estimated intercept is 5.1133.

 Fuel_Efficiency: The coefficient for Fuel_Efficiency is 0.8095.

 Engine_Size: The coefficient for Engine_Size is 2.2243.

Model Fit:

 R-squared: The R-squared value is 0.999, indicating that 99.9% of the variability in the
dependent variable is explained by the model.

Statistical Significance:

 F-statistic: The F-statistic is 765.5 with a p-value of 0.00130, indicating that the overall model is
statistically significant.

 P-values: Fuel_Efficiency (0.008) and Engine_Size (0.148) are statistically significant at

conventional significance levels.

Practical Significance:
  Similar to Model 1, practical significance depends on the context. Both Fuel_Efficiency and
Engine_Size seem to have an impact on Price_in_Thousands.

Model Comparison:

 R-squared: Model 2 has a higher R-squared value, indicating that it explains more variability in
the dependent variable.

 F-statistic: Both models have significant F-statistics, but Model 2's F-statistic is slightly higher.

 Coefficients: In Model 2, the coefficient for Engine_Size is not statistically significant at a

conventional level (p-value = 0.148). Model 1, with only Fuel_Efficiency, might be preferred if
Engine_Size is not deemed important.

In summary, both models are statistically significant, but Model 2 explains more variability. However, the
practical significance of the coefficients should be considered, and a decision might depend on the
specific goals of your analysis. If Engine_Size is not critical, Model 1 could be preferred for simplicity.