Student Exam

1. If the sum of squared error variation of a variable Y is 28.95 and the sum of squared total variation of the regression is 290.60 the R square value for the regression is:(Points : 3)

11.9 99.5 88.1 78.3 90

Student Exam

The following study estimated demand equation for illicit drugs using a sample size of 4000. The significance level desired for the regression is 5%. The regression output is (Y= Number of days illicit drugs are used):

Variable Coefficient

Estimate t-Value

Intercept 3.089 17.98

Alcohol Prices per liter 0.045 5.93

Income ($1000) 0.000057 17.45

Male (1 if male) 1.637 29.23

Female (1 if female) 1.282 6.35

Marital Status (1 if married) -0.807 1.13

Age 12 to 20 (1 if between 12 & 20) -1.531 17.97

Age 21 to 30 (1 if between 21 & 30) .035 0.51

Black (1 if Black) .580 1.84

Hispanic (1 if Hispanic) -0.564 -1.03

Years in prison for felony drug possession -0.532 -4.72

Which of the above variables would you not keep in the regression?(Points : 3)

Discard only variables with negative t-values (Hispanic and Years in prison). Delete Marital Status, Age21-30, Black, and Hispanic. Discard Female. 2 and 3 above. Keep all of the variables.

Student Exam

15. Given the following information below derived from a regression with 200 data observations for each variable are the independent variable coefficients significantly different from zero?

Variable Coefficient Std. Error t-values

Constant 564 897

X1 749 638

X2 .683 .339

(Points : 3)

X1 and X2 are not significantly different from zero. X2 is significantly different from zero while X1 is not. X1 is significantly different fromzero while X2 is not. Both X variables are significant.

Student Exam

16. What statistic can be used to develop a forecast confidence interval around the forecast values?(Points : 3)

Standard deviation of the Y data Standard Error of the Coefficient Standard Error of the Estimate F statistic SST