Suppose your supervisor has asked you to fit a simple firsto

Suppose your supervisor has asked you to fit a simple first-order multiple linear regression model relating the amount of money consumers report spending on gilts during the holiday season (i.e., Y) to the x variables age, gender, marital status, and monthly income. Assume that gender = 1 if a person is female, and 0 otherwise, and that marital status 1 if married, and 0 otherwise. The fitted model is -98.4 + 4*age + 43.4*gender + 84.7*marital_status + 0.08\'monthly_income. What is the estimated mean amount of money spent in the holiday season for a 28 year-old married man who earns $8,045 per month?

Solution

estimation is done using regression equation as:

Y-hat = -98.4 + 4*28 + 43.4*0 + 84.7*1 + 0.08*8045 = 741.9