Assignment 3 Question 1 (4 points) Suppose you carry out a one-way ANOVA to test
ID: 3310840 • Letter: A
Question
Assignment 3 Question 1 (4 points) Suppose you carry out a one-way ANOVA to test whether the mean selling prices of houses in three cities are the same. The three sample means are as follows: City 1: $365,880 City 1: $365,900 City 1: $366,054 The p-value is 0.04. Part (a) (2 points) Are the differences between these means statistically significant? Justify your answer. Part (b) (2 points) Are the differences between these means of practical significance? Justify your answer. Continued on p. 2. ** Question 2 (3 points) The covariance between variables A and B is 14.73. The correlation coefficient between variables C and D is 0.78. Is it possible to tell which pair of variables is more strongly correlated? Explain your answer Question 3 (3 points) A researcher would like to find out what makes people decide to start a family. He notices that in many cases, people buy a car seat for infants and then just a few weeks later their baby is born. Hence he suggests that the act of buying a car seat causes women to have babies. Do you agree that such causation exists? Explain your answer. Question 4 (8 points) The following table shows the output of a regression of selected S&P; 500 companies' net income in billions of dollars (the dependent variable) on their sales in billions of dollars (the independent variable) Page 1 of 2Explanation / Answer
Question 4.
Part a.
Estimated value of slope coefficient = 0.062578
This means for every single unit increase in sales net income will increase by 0.062578 units
Part b.
estimated value of intercept = 4.1897
This means the constant value of income that every S&P companies has independent of its sales
Part c.
Estimated value of the intercept does not make sense because the confidence interval has zero in between which means we can not reject the null hypothesis and there are not significant evidence to conclude that intercept is not equals to zero.
Part d.
Yes estimate of the slope coefficient is statistically significant. Because the p-value is less than the significance level of 0.05 hence we can conclude that there are significant evidence to conclude that slope is not equals to zero.