SCENARIO 14-6
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y) . To provide its customers with information on that matter, a large real estate firm used the following 2 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit ( X1 ) and the amount of insulation in inches ( X 2 ) . Given below is EXCEL output of the regression model.
Also SSR (X1 | X2) = 8343.3572 and SSR (X2 | X1) = 4199.2672
-Referring to Scenario 14-5,when the microeconomist used a simple linear regression model with sales as the dependent variable and wages as the independent variable,she obtained an r2 value of 0.601.What additional percentage of the total variation of sales has been explained by including capital spending in the multiple regression?
Definitions:
Standard Error
Measures the accuracy with which a sample represents a population, showing the dispersion of sample means around the true population mean.
Test Statistic
A standardized value derived from sample data during a hypothesis test that is used to determine the p-value or to compare against the critical value.
Population Means
The average value of a set of characteristics or figures for the entire population.
Credit Purchases
Transactions where goods or services are acquired with an agreement to pay later, often using a credit card or account.
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