A healthcare executive is using multiple linear regression m

A healthcare executive is using multiple linear regression model to predict total revenues. She has decided to include both patient length of stay and insurance type in her model. Patient length of stay is measured in days. Insurance type is grouped into the following six categories: Medicare, Medicaid, Managed care, HMO, Self-Pay, and Charity. How many parameters should be included in the multiple linear regression model? Select one:

a. The multiple linear regression model should include five parameters.

b. The multiple linear regression model should include seven parameters.

c. The multiple linear regression model should include eight parameters.

d. The multiple linear regression model should include six parameters.

e. The multiple linear regression model should include nine parameters.

Solution

b. The multiple linear regression model should include seven parameters.

Either one parameter for intercept, one for patient length and 5 for insurance type in reference to a base type

OR one parameter for patient length and 6 for insurance types

So total in any case = 7