Concluding Project Assignment 05 AUG 2020

The data set you received consists of information about annual household spending (dependent variable {DV}) and selected variables (independent variables {IV's}) showing amounts that each household in your sample spent on each of the IV's during the year.Note that the sum of all IV's does not equal the total spending (DV) value; other items were purchased, representing omitted variables.Also, with respect to your sample, a value of zero ($0) in a cell (e.g. health care, for example) means that for that year, the observation spent nothing on that item.

Some additional hints:For those of you who need a refresher of your algebra course(s), you might want to look over section 13.3.This section reviews Linear Equations and the information about relationships between variables that these models develop.Also, section 13.5 is more advanced than appropriate for this course and you need not worry about it (likely you will study these models in econometrics (if you major in economics or finance - or choose it as an elective).

Finally, sections 13.6 & 13.7 cover predictions using regression and a review of using EXCEL for regression analysis.You might find this information beneficial in answering the project questions.

Chapter 13 is, as best I can tell, has 29 end of chapter questions and the solutions section provides answers to each of them.You may want to refer to these as hints with respect to developing solutions for the project questions.This a WORD document that you should find easy to download.If you want to use it as your solution document, you can type or draw your response below each question and the document will expand to include your information, with subsequent questions remaining as you move forward.

Please use an 11- or 12-point Times Roman font and dg for any narratives you as a part of your responses.

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THE QUESTIONS:

From the Descriptive Statistics section, interpret the following items for your Spending $ and House $ variables:

• Mean:

• Standard Error (of the mean):

• Median

• Standard Deviation (of the sample):

From the Regression Analysis section of your sample:

• Report and comment on the following values

• The R Square (R²) =

• The Adjusted R Square (Adj R²) =

• What does the R2 value tell about your data:

• What is the interpretation difference between R² and Adj R²?

• How many degrees of freedom does your model have (pg. 343 & pg. 422):

• What is the critical t value for your model (from t table - pgs. 608-609):

• Which variable(s) in your model are statistically significant and how do you know this?

• a)What is the confidence interval for House and what does it mean?

b) How does the confidence interval indicate lack of statistical significance for a variable's

coefficient?

• Write out the value for the Significance F, both as it appears in the regression table and as an actual number.

• Compose a short story (no more than half of a double-typed page) about what the regression analysis tells you about Household Spending.This may take only a couple or three sentences.