A student estimated a model of airline prices based on trip distances: p = 138.9

Question

A student estimated a model of airline prices based on trip distances: p = 138.97 + 0.0624m - 47.83u + 0.0213(m * u) Where P Is the ticket price, M is the number of miles the flight traveled, U=1 if the ticket is for a United Airlines flight, and 0 If it is for a Delta Airlines flight. The student also estimated a separate equation for only United Airlines tickets: p = 91.14 + 0.0837m After comparing both equations, the student emailed her professor this question: You mentioned In class that the estimated values for the first equation should be the same as If each airline were estimated separately, but I didn't get any of the same values. I'm not sure If I misheard you or I did something wrong in my analysis. a. How would you respond?

Explanation / Answer

the first equation is

p = 138.97 + 0.0624m - 47.83u + 0.0213(m*u)

For United Airlines u = 1, Hence above equation will be simplified as

p = 138.97 + 0.0624m - 47.83*1 + 0.0213(m*1)

p = 138.97 - 47.83 + 0.0624m + 0.0213m

p = 91.14 + 0.0837m

As you see this simplified equation is same as the equation you got for United Airlines tickets.

This means your work is correct and you got the valid equation.

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