Part (b) Interpret the estimated value of the coefficient on the “Gasoline dummy

Question

Part (b)

Interpret the estimated value of the coefficient on the “Gasoline dummy” variable, i.e., explain what the number means in this regression.

Part (c)

What is the estimated average effect of the miles driven per month on the monthly maintenance cost for buses with Diesel engines?

Part (d)

What is the estimated average effect of the miles driven per month on the monthly maintenance cost for buses with gasoline engines?

Part (e)

What share of the variation in the “Maintenance per month” variable can be explained by this regression?

SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Sq 0.38861098 Standard Erro 45.8375958 Observations 0.63750955 0.40641842 104 ANOVA df Significance F 3 143858.866 47952.9553 22.8229468 2.4534E-11 MS Regression Residual Total 100 210108.519 2101.08519 103 353967.385 Coefficients Standard Error t Stat 80.9244942 109.296831 0.74041026 P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% 0.460786 135.9173 297.766293-135.9173 297.766293 Miles per mor 0.46328520.129957323.564902710.00056001 0.20545358 0.72111681 0.205453580.72111681 Gasoline dum -324.64698 149.445733 -2.1723402 0.03219301 -621.14305 28.150899 -621.14305-28.150899 Interaction te 0.35581472 0.17808462 1.99800924 0.04843122 0.0024999 0.709129530.0024999 0.70912953 Intercept

Explanation / Answer

Part (b)

Interpret the estimated value of the coefficient on the “Gasoline dummy” variable, i.e., explain what the number means in this regression.

Ans: The mean monthly maintenance cost for buses of gasoline engines is less than Diesel engines by $324.64698

Part (c)

What is the estimated average effect of the miles driven per month on the monthly maintenance cost for buses with Diesel engines?

Ans: The estimated average effect of the miles driven per month on the monthly maintenance cost for buses with Diesel engines is $0.4632852.

Part (d)

What is the estimated average effect of the miles driven per month on the monthly maintenance cost for buses with gasoline engines?

Ans: The estimated average effect of the miles driven per month on the monthly maintenance cost for buses with gasoline engines is $(0.4632852-324.64698).

Part (e)

What share of the variation in the “Maintenance per month” variable can be explained by this regression?

Ans: Share of the variation in the “Maintenance per month” variable can be explained by this regression is

(143858.87*100/353967.39)%=41.00%.

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