Bob White is conducting research on monthly expenses for medical care, including
ID: 2900918 • Letter: B
Question
Bob White is conducting research on monthly expenses for medical care, including over-the-counter medicine. His dependent variable is monthly expenses for medical care while his independent variable is number of family members. Below is his Excel output.
SUMMARY OUTPUT
Regression Satistics
Multiple R 0.695
R Square 0.483
Adjusted R Sq 0.474
Standard Error 55.278
Observation 21
ANOVA
df SS MS F Significance F
Regression 1 99929.47 99929.47 32.70311 0.00016
Residual 19 58057.48 3055.657
Total 20 157987
Coefficients Standard Error t Stat P-value
Intercept 110.47 35.53407 3.109087 0.0057
X 16.83 0.819024 5.718663 0.00016
(a) What is the prediction equation?
(b) Based on his model, each additional family member increases the predicted costs by how much?
(c) Based on the significance F-test, is this model a good prediction equation?
(d) What percent of the variation in medical expenses is explained by the size of the family?
(e) Can the null hypothesis that the slope is zero be rejected? Why or why not?
(f) What is the value of the correlation coefficient?
Explanation / Answer
a) monthly expenses = 110.47 + 16.83 * number of family members
b) 16.83
c) yes because F has very high value and it is statistically significant
d) 47.4 % ( adjusted R square)
e) yes it is rejected because t value of slope is 5.71 and it is statistically significant
f) sqrt(0.483) = 0.694