Question
Problem Price of a refrigerator ( PRICE ) in dollars can be explained by its characteristics such as annual cost of operation ( OPCOST )
Problem
Price of a refrigerator (PRICE) in dollars can be explained by its characteristics such as annual cost of operation (OPCOST) in dollars, total size in cubic feet of the refrigerator (REFRSIZE) [the total size = the size of the freezer + the size of the non-frozen cooling compartment], size in cubic feet of the freezer (FREZSIZE), number of shelves (SHELVES), and number of features like egg racks and ice makers (FEATURES).
We have data on these variables for a set of refrigerators in the file problem3.xlsx.
Use Excel to estimate the model:
PRICE = b0 + b1OPCOST + b2REFRSIZE + b3FREZSIZE + b4SHELVES + b5FEATURES
(a) (3 pts) Report and interpret the coefficient of FREZSIZE.
(b) (3 pts) Predict the price of an average refrigerator. That is, predict the price of a refrigerator that has "average values" for the various characteristics. And, build a 95% confidence interval for the prediction.
(c) (6 pts) What is the probability that the predicted price in part (b) falls between $550 and $650?
Please show your calculation.
(d) (6 pts) It is of interest to study how price of refrigerator changes with a change in proportion of freezer size vis--vis the total refrigerator size.
Modify the regression equation to answer the following question...
Keeping the total refrigerator size constant, what is the percentage impact on PRICE for every percentage increase in the proportion of freezer size vis--vis the total refrigerator size.
Clearly write down your regression equation, and answer the question asked.
PRICE OPCOST REFRSIZE FREZSIZE SHELVES FEATURES 595 75 12.8 5.7 3 2 685 75 12.9 5.7 3 1 535 67 13.3 4.5 1 6 600 67 13.2 4.5 3 5 605 67 13.3 4.5 3 3 665 67 13.3 4.5 1 10 515 67 13.9 4.1 2 1 485 68 12.9 5.1 2 3 550 68 13.1 5.1 2 3 555 68 13.1 5.1 2 2 610 61 13.1 5.1 2 3 580 60 14.3 4.3 2 4 700 60 14.3 4.3 4 4 505 68 13.1 5.1 2 2 555 68 13.1 5.1 2 2 500 72 13.9 4.1 2 1 675 61 13.2 4.8 3 3 545 75 12.8 5.7 3 3 600 75 12.8 5.7 3 1 700 69 12.9 5.7 3 6 760 69 12.8 5.7 1 5 530 75 12.9 5.7 3 2 550 68 13.1 5.1 2 2 580 68 13.1 5.1 2 1 530 73 13.7 4.4 3 2 550 73 13.7 4.4 3 1 615 60 14.3 4.3 2 1 710 60 14.3 4.3 4 3 555 62 13.2 4.8 3 1 590 62 13.2 4.8 3 2 460 66 14.2 4.4 1 3 520 66 14.2 4.4 1 5 1200 81 12.6 7.3 5 12 745 90 12.9 6.8 5 6 800 90 12.9 6.8 5 7 840 94 14.7 7.4 1 5 880 94 14.7 7.4 1 5
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