In exercise 4 the following estimated regression equation re

In exercise 4, the following estimated regression equation relating sales to inventory investment and advertising expenditures was given. y = 25 + 10x_1 + 8x_2 The data used to develop the model came from a survey of 10 Stores: for these data SST = 16,000 and SSR = 12,000. Compute SSE, MSE, and MSR. What is R^2?

Solution

A).

Source

SS

DF

MS

F

SSR

12000

2

6000

10.4990

SSE

4000

7

571.4286

Total

16000

9

SSE=4000

MSE=571.4286

MSR=6000

B).

R² = 12000/16000

=0.75

Source	SS	DF	MS	F
SSR	12000	2	6000	10.4990
SSE	4000	7	571.4286
Total	16000	9