TABLE 14-12 As a Project for His Business Statistics Class, a Student

question 98

Multiple Choice

TABLE 14-12
As a project for his business statistics class, a student examined the factors that determined parking meter rates throughout the campus area. Data were collected for the price per hour of parking, blocks to the quadrangle, and one of the three jurisdictions: on campus, in downtown and off campus, or outside of downtown and off campus. The population regression model hypothesized is Y_i = α + β₁X_1i + β₂X_2i + β₃X_3i + ε
where
Y is the meter price
X₁ is the number of blocks to the quad
X₂ is a dummy variable that takes the value 1 if the meter is located in downtown and off campus and the value 0 otherwise
X₃ is a dummy variable that takes the value 1 if the meter is located outside of downtown and off campus, and the value 0 otherwise
The following Excel results are obtained.

-Referring to Table 14-12, what is the correct interpretation for the estimated coefficient for x₂?

• A) All else equal, the estimated mean difference in costs between parking on campus, and parking outside of downtown and off campus is -$0.24 per hour.
• B) All else equal, the estimated mean difference in costs between parking in downtown and off campus, and parking on campus is -$0.24 per hour.
• C) All else equal, the estimated mean difference in costs between parking in downtown and off campus, and parking outside of downtown and off campus is -$0.24 per hour.
• D) All else equal, the estimated mean difference in costs between parking in downtown and off campus, and parking either outside of downtown and off campus or on campus is -$0.24 per hour.