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Multiple Regression
Section 14.5
14.1 The coefficients of independent variables in a multiple regression model are interpreted as the change in y
for a one-unit change in the corresponding independent variable when all other independent variables are
held constant. For example, B2 gives the change in y due to a one-unit change in x2 when x1, x3, ... , xk are
held constant.
14.3 The independent variables can have a non-linear relationship but cannot be linearly related.
b. The value of a = 15.065 gives the value for y when x1 = 0 and x2 = 0. However, since x1 = 0 and
x2 = 0 do not occur together in the sample data, the estimate is invalid. The value b1 = .167 gives the
change in y for a one-unit change in x1 when x2 is held constant. The value b2 = .132 gives the
change in y for a one-unit change in x2 when x1 is held constant.
f. df = n k 1 = 11 2 1 = 8
The 99% confidence interval for 1 is
b1 tsb1 = .167 (3.355)(.034) = .167 .114 = .053 to .281
14-1
14-2 Chapter 14 Multiple Regression Analysis
b. The value of a = 11.258 gives the expected weekly sales for restaurants in areas with zero population
and a mean annual household income of $0. However, since the sample data does not include any
restaurants in areas with zero population and a mean annual household income of $0, the estimate is
invalid. The value b1 = .011 indicates that for each increase of 1000 in population, a restaurants sales
are expected to increase by $11 when mean annual household income is held constant. The value b2 =
.199 indicates that for each increase of $1000 in mean annual household income, a restaurants sales
are expected to increase by $199 when population is held constant.
4. A regression line obtained by using population data is called the population multiple regression model.
The estimated multiple regression model is obtained from sample data.
5. The regression coefficients in a multiple regression model are called the partial regression coefficients
because each of them gives the effect of the corresponding independent variable on the dependent variable
when all other independent variables are held constant.
6. R 2 is the proportion of the total sum of squares (SST) that is explained by the multiple regression model.
R 2 is the coefficient of multiple determination adjusted for degrees of freedom. R 2 generally increases as
more explanatory variables are added to the regression model while the value of R 2 may increase,
decrease, or stay the same as more independent variables are added. R 2 is always non-negative; R 2 can
be negative.
7. a. We would expect the relationship between sale price and lot size to be positive, the relationship
between sale price and living area to be positive, and the relationship between sale price and age to be
negative.
b. y = 200.153 + 11.889 x1 + .099 x 2 7.551x3
The signs of the coefficients of the independent variables obtained in the solution are consistent with
the expectations in part a.
Chapter 14 Self-Review Test 14-3
c. The value of a = 200.153 gives the expected sale price of a house for a lot size of zero and living area
of zero at age zero. However, since x1 = 0, x2 = 0, and x3 = 0 do not occur together in the sample data,
the estimate is invalid. In fact, a lot size of zero and a living area of zero do not make sense. The
value b1 = 11.889 indicates that for an increase of one acre in the lot size, the sale price of a house is
expected to increase by $11,889 when living area and age are held constant. The value b2 = .099
indicates that for an increase of one square foot in living area, the sale price of a house is expected to
increase by $99 when lot size and age are held constant. The value b3 = 7.551 indicates that for an
increase of one year in age, the sale price of a house is expected to decrease by $7551 when lot size
and living area are held constant.