SCENARIO 18-2
One of the Most Common Questions of Prospective $\beta$

question 83

Multiple Choice

SCENARIO 18-2
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 4 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit ( X₁ ) , the amount of insulation in inches ( X ₂ ) , the number of windows in the house ( X₃ ) , and the age of the furnace in years ( X ₄ ) . Given below are the EXCEL outputs of two regression models.


-Referring to Scenario 18-2,the estimated value of the partial regression parameter $\beta$ ₁ in Model 1 means that

• A)holding the effect of the other independent variables constant,an estimated expected $1 increase in heating costs is associated with a decrease in the daily minimum outside temperature by 4.51 degrees.
• B)holding the effect of the other independent variables constant,a 1 degree increase in the daily minimum outside temperature results in a decrease in heating costs by $4.51.
• C)holding the effect of the other independent variables constant,a 1 degree increase in the daily minimum outside temperature results in an estimated decrease in mean heating costs by $4.51.
• D)holding the effect of the other independent variables constant,a 1% increase in the daily minimum outside temperature results in an estimated decrease in mean heating costs by 4.51%.

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