The data in Table 8.6 gives the amount of credit card debt for a sample of 24

Question:

The data in Table 8.6 gives the amount of credit card debt for a sample of 24 individuals along with their age, education level, and yearly salary.

a. Write the population linear regression equation.

b. Using this data set, develop a model that can be used to predict credit card debt based on age, education, and salary.

c. Is the overall model useful in predicting credit card debt?

d. Draw a matrix plot that shows the relationship between the response and each of the predictor variables.

e. Use exploratory techniques and any formal tests to check relevant model assumptions and check for multicollinearity.

f. What factors are significant in predicting credit card debt? Interpret your findings in the context of the problem, and comment on whether you think your conclusions make sense.

g. Using your estimated regression equation, estimate what the average credit card debt would be for an individual who is 25 years old, with 20 years of education, and whose salary is \(\$ 50,000\) per year.

h. Can you think of any other factors that could influence the amount of credit card debt?

Table 8.6

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