An Internet service provider offers three types of customer accounts: premium, standard, and discount. The firm is trying to determine if the average length of an internet session is significantly different for the three account categories.

In particular, the company believes that (i) the average session length for standard accounts is significantly greater than that for discount accounts and that (ii) the average session length for premium accounts is significantly greater than that for standard accounts.

You are asked to verify these conjectures via regression analysis.

Problem 1. a)

Define the variables necessary to conduct a regression analysis.

Problem 1. b)

State the population regression model.

Provide an economic interpretation for each coefficient in your model (including the intercept term).

Problem 1. d) i)

State the alternative hypothesis (in terms of population regression model coefficients) that must be tested in order to verify the company's first conjecture about average session lengths: (i) the average session length for standard accounts is significantly greater than that for discount accounts

Problem 1. d) ii)

State the alternative hypothesis (in terms of population regression model coefficients) that must be tested in order to verify the company's second conjecture about average session lengths: (ii) the average session length for premium accounts is significantly greater than that for standard accounts.