The following regression output was obtained from a study of architectural firms
ID: 3020388 • Letter: T
Question
The following regression output was obtained from a study of architectural firms. The dependent variable is the total amount of fees in millions of dollars. Predictor Coeff SE Coeff t p-value Constant 7.987 2.967 2.690 0.010 X1 0.122 0.031 3.920 0.000 X2 –1.120 0.053 –2.270 0.028 X3 –0.063 0.039 –1.610 0.114 X4 0.523 0.142 3.690 0.001 X5 –0.065 0.040 –1.620 0.112 Analysis of Variance Source DF SS MS F p-value Regression 5 3710.00 742.00 12.89 0.000 Residual Error 46 2647.38 57.55 Total 51 6357.38 X1 is the number of architects employed by the company. X2 is the number of engineers employed by the company. X3 is the number of years involved with health care projects. X4 is the number of states in which the firm operates. X5 is the percent of the firm’s work that is health care–related.
d-1. State the decision rule for .05 significance level. Reject H0 if t < or t > .
Explanation / Answer
Here n-1=51=>n=52
i=5 (Number of independent variables)
df=n-(i+1)=52-(5+1)=46
at 0.05 level of significance, critical value of t is 2.013. Therefore:
Reject H0 if t < -2.013 or t > 2.013.