Regression Practice Questions

1. Carina obtains cash from an ATM (cash machine). She suspects that the rate at which she spends
cash is affected by the amount of cash she withdrew at her previous visit to an ATM. To
investigate this she deliberately varies the amount she withdraws. She records for each visit to an
ATM, the amount $X, withdrawn and the number of hours, Y, until her next visit to an ATM.

Withdrawal 1 2 3 4 5 6 7 8 9 10
X ($) 40 10 100 110 120 150 20 90 80 130
Y (hours) 56 62 195 330 94 270 48 196 214 286

a. Is there a linear relationship between the amount withdrawn X and number of hours before
she withdraws? If so, can it be represented by an equation? (7 marks)
b. She wants to know how much time would $90 last (hours -Y) before she needs to withdraw.

2. Given below is the regression output, comment on the overall strength of the model and the
significance of each predictor.

a. Comment of the coefficient of determination, what does it imply in the regression model?

b. Write the regression equation from the above information.

 c. Evaluate the independent variables and comment on their significance .

3. Executives of a video rental chain want to predict the success of a potential new store. The
company’s researcher begins by gathering information on number of rentals and average family
income from several of the chain’s present outlets.
Rentals Average
Family
Income
($1,000)
710 65
529 43
314 29
504 47
619 52
428 50
317 46
205 29
468 31
545 43
607 49
694 64

Develop a regression model to predict the number of rentals per day by the average family
income.
a. Comment on the Coef of determination; F- significance.
b. Write the regression equation.
c. What would be the rental if the average family income is $35,000.

4. Study the following Excel regression output for an analysis attempting to predict the number of
union members in the United States by the size of the labour force for selected years over a 30-
year period from data published by the U.S. Bureau of Labour Statistics.

a. Determine the number of observations under consideration?

b. Calculate the coef. of determination and comment on the strength of the model.
c. Is total employment significant to determine the total labour force? If so, why?
d. Write the regression equation.