Homework Sourse1 Examine all regression coefficients in this expression E 1
1) Examine all regression coefficients in this expression:
E= 1,000 - 0.2P + 0.13Y + 0.8A R2 = 0.75
(2.32) (0.42) (3.23) (4.00) N=30
and point out which are statistically significant and which are not, and explain why.
2) Interpret one of the significant regression coeffecients.
Solution
a. Given the test statistics and the degrees of freedom, we will find the p-value for each regression coefficients and compare it with the level of significance, say 0.05.
Since the p-value for the coefficient of intercept, Y and A are less than 0.05, therefore, at 5% level of significance, coefficient of intercept, Y and A are significant. And coefficient of P > 0.05, hence it is not significant.
b. Consider the significant cofficient of A = 0.8. This means that, if rest all others explanatory variables are held constant, a unit increase in A would bring 0.8 unit increase in E.
| variable | Coeficient | t-statistics | p-value |
| intercept | 1,000 | 2.32 | 0.028 < 0.05 |
| P | 0.2 | 0.42 | 0.678 > 0.05 |
| Y | 0.13 | 3.23 | 0.003 < 0.05 |
| A | 0.8 | 4.00 | 0.000 < 0.05 |
