Tutorial 7:

Q4. Write estimated regression equations for the following scenarios (to simply fy matters, assume
all coefficients are positive Explain how the qualitative variable is accounted for in each situation: a) Remember with dummy variables we need one less than the number of dummy variable categories. In this case, there are 3 dummy variable categories: Plumber, Journalist and Other therefore we need 2 dummy variables: X2 and X3

b)

Q5.

a) Interpret coefficients: b1: For every 1C increase in temperature, estimated daily attendance at the Brisbane pool will increase by 8 people holding all other variables constant. b2: When its a weekend, pool attendance will increase by 150 people compared to weekdays holding all other variables constant. b) Estimate no. people swimming on a zero degree weekday:

This level of pool attendance is unlikely. This doesnt mean an error was made in constructing the regression model, but illustrates that extrapolating from the data set is unlikely to give sensible estimates.

Q6.
a)

b) b2: For every 1 year increase in the life span of the father, the customers life expectancy will increase by 0.303005 years, holding all other variables constant. b3: For every 1 year increase in the life span of the Grandmother, the customers life expectancy will increase by 0.031605 years, holding all other variables constant. b5: if the customer is a smoker, their life expectancy will decrease by 3.71899 years compared to if they werent a smoker holding all other variables constant.

c) Step 1: State Hypothesis

(no significant relationship b/w y all xs)

Step 2: Decision Rule (always upper-tail F-test) Reject H0 if p-value < = 0.05 Step 3: Calculate Test Statistic + P-value

p-value = 7.6588E-32 =

(a really small number)

Step 4: Decision: Reject H0 as p-value < = 0.05 Step 5: Conclusion: There is sufficient evidence at the 5% level of significance to conclude that there is a significant relationship between life expectancy and at least one of the explanatory variables: life of mother, father, grandmother, grandfather and whether or not the customer is a smoker.

D + E) Ive included both E and D in the table below. Two-tailed t-tests on each of the variables! as they are two tail tests, we can use the p-values straight from the coefficient table to do our test.

Step 1 2 3 4 5

Mother

GMother Gfather Smoker Each has the same decision rule: Reject H0 if p-value < = 0.05 p-value = p-value = p-value = p-value = p-value = Reject H0 Reject H0 Do not reject Do not reject Reject H0 H0 H0 There is sufficient evidence at the 5% level of significance to conclude that there is a significant relationship between customers life expectancy and the variables MOTHER, FATHER and SMOKER. There is insufficient evidence at the 5% level of significance to conclude that there is a significant relationship between customers life expectancy and the variables Gmother and Gfathers.

Father

F)

g)

In this example, they give us R2 in the Regression statistics output! Therefore we dont have to calculate it its already been done for us.

80.51% of the variation in the cusomters life expectancy can be explained by the variation in the explanatory variables: Mother, Father, GMothers, GFathers, and smoker