Problem 3

Please help me solve this problem and answer the question in Excel with the formulas that I can use to follow and understand. Thank you!

The Times-Observer is a daily newspaper in Metro City. Like many city newspapers, the Times-

Observer is suffering through difficult financial times. The circulation manager is studying other

papers in similar cities in the United States and Canada. She is particularly interested in what

variables relate to the number of subscriptions to the paper. She is able to obtain the following

sample information on 25 newspapers in similar cities.

Subscriptions	Population	Adv	Income
38.95	588.90	13.06	33.51
37.66	585.30	13.24	33.63
38.55	566.30	13.43	33.68
38.78	642.90	13.61	33.75
38.67	624.20	13.99	33.86
38.23	603.90	14.18	33.90
37.90	571.90	14.86	34.05
38.28	584.30	17.64	34.11
38.95	605.00	17.72	34.17
40.27	676.30	17.73	34.21
39.30	587.40	18.20	34.25
38.84	576.40	18.53	34.27
38.14	570.80	19.82	34.45
39.39	586.50	20.24	34.66
38.29	544.00	20.94	34.72
39.15	611.10	21.38	34.84
38.29	643.30	21.61	34.88
38.09	635.60	21.68	35.20
37.83	598.90	21.70	35.26
39.37	657.00	22.35	35.44
37.81	595.20	23.41	35.72
38.42	520.00	23.69	35.76
38.83	629.60	23.81	35.81
39.33	680.00	25.39	35.85
41.24	651.20	25.92	35.87

Using Excel, run a multiple regression analysis (ensure level of significance = 0.05).

a. What is the dependent variable?

b. What are the independent variables?

c. Create a scatter diagram for each independent variable acting on the dependent variable.

Comment.

d. What is the Null Hypothesis for the overall model?

e. What is the Alternative Hypothesis for the overall model?

f. What is the multiple regression equation?

g. What is the standard error? Describe what this means as related to the problem.

h. For your initial model equation, discuss whether R2 or Adjusted R2 should be used in interpreting

how good the linear equation is. Then, interpret the appropriate R2 value.

i. What does the overall statistical significance explain with respect to the model?

j. Evaluate the p-value for each independent variable. Should any of the independent variables be

dropped? Why or why not?

k. Develop a correlation matrix for the independent variables. Should any of the independent

variables be dropped? Why or why not?

l. Is this a good model?