A particular savings and loan corporation is interested in determining how well the amount of money in family savings accounts can be predicted using the three independent variables-annual income, number in the family unit, and area in which the family lives. Suppose that there are two specific areas of interest to the corporation. The following data were collected, where
y = Amount in all savings accounts
x1 = Annual income
x2 = Number in family unit
x3 = 0 if in Area 1; 1 if not
Both y and x1 were recorded in units of $1000.

Regression Analysis: y versus x1, x2, x3
The regression equation is
y = -3.11 + 0.503 x1 - 1.61 x2 - 1.15 x3
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The following computer printout resulted when the data were analyzed.
a. Interpret R2 and comment on the fit of the model.
b. Test for a significant regression of y on x1, x2, and x3 at the 5% level of significance.
c. Test the hypothesis H0: β3 = 0 against Ha: β3 ‰  0 using a = .05. Comment on the results of your test.
d. What can be said about the utility of x3 as a predictor variable in this problem?

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0 3 6 5 4 3 2 2 4 3 2 2864537268 9385004585 x| 1 2 2 1 3 2 3 2 1 4 332438552 0010512105 Predictor Constant Coef -3.112 0.50314 -1.6126 -1.155 SE Coef 3.600 0.86 0.421 6.56 0.001 0.657 2.45 0.050 1.791 0.64 0.543 0.07670 S-1.89646 R-Sq 92.2% R-Sq ( adj ) 88.4% = Analysis of Variance Source Regression Residual Error 6 Total DF MS 3 256.621 85.540 23.78 0. 001 3.597 sS 21.579 9 278.200 Source DF Seq ss 1 229.113 26.012 1.496 x2