An Economist Wanted to Develop a Multiple Regression Model to Enable

question 34

Essay

An economist wanted to develop a multiple regression model to enable him to predict the annual family expenditure on clothes. After some consideration, he developed the multiple regression model: $y = \beta _ { 0 } + \beta _ { 1 } x _ { 1 } + \beta _ { 2 } x _ { 2 } + \beta _ { 3 } x _ { 3 } + \varepsilon$ .
Where:
y = annual family clothes expenditure (in $1000s) $x _ { 1 }$ = annual household income (in $1000s) $x _ { 2 }$ = number of family members $x _ { 3 }$ = number of children under 10 years of age
The computer output is shown below.
THE REGRESSION EQUATION IS
ŷ = $1.74 + 0.091 x _ { 1 } + 0.93 x _ { 2 } + 0.26 x _ { 3 }$ $$\begin{array} { | c | c c c | } \hline \text { Predictor } & \text { Coef } & \text { StDev } & \mathrm { T } \\\hline \text { Constant } & 1.74 & 0.630 & 2.762 \\x _ { 1 } & 0.091 & 0.025 & 3.640 \\x _ { 2 } & 0.93 & 0.290 & 3.207 \\x _ { 3 } & 0.26 & 0.180 & 1.444 \\\hline\end{array}$$ se = 2.06, R2 = 59.6%. $$\begin{array}{l}\text { ANALYSIS OF VARIANCE }\\\begin{array} { | l | c c c c | } \hline \text { Source of Variation } & \mathrm { df } & \text { SS } & \text { MS } & \text { F } \\\hline \text { Regression } & 3 & 288 & 96 & 22.647 \\\text { Error } & 46 & 195 & 4.239 & \\\hline \text { Total } & 49 & 483 & & \\\hline\end{array}\end{array}$$ Test at the 10% significance level to determine whether annual household income and annual family clothes expenditure are linearly related.

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Definitions:

Decentralised Communication Network

involves a system where communication flows in a less hierarchical manner, empowering individuals at all levels to engage and exchange information freely.

Restricted Communication Network

A communication network where information flow is limited by certain rules, protocols, or structures, often for security or efficiency reasons.

Team Cohesion

The degree to which team members are united, working collaboratively towards common goals, and demonstrating strong interpersonal bonds.

Direct Physical Contact

Personal interaction that involves touch or face-to-face communication, often considered more impactful or genuine than virtual communication.