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Suppose we were trying to build a linear model for Y : selling price of a car, based on X1 : current total distance of
Suppose we were trying to build a linear model for Y : selling price of a car, based on X1 : current total distance of car (in Kilometers), and X2 2 type of fuel (CNG (Combustible Natural Gas), Diesel, Gasoline). Price is given in thousands of dollars, and X1 is given in thousands of kilometers. Y SSE Fit X1+X2 10819.38 17.64+(-U.07)X1+(1.46)X2,D+(2.6)X2,G X1+X2+X1*X2 10769.85 1409+(-0.04)X1+(5.7)X2,D+(0.86)X2,G+(-0.04)X1X2,D+(0.03)X1X2,G There are n 2 1436 rows total in this dataset. Use this table to answer the following questions: a) State the null and alternative for testing if the interaction terms may be dropped from the model. State your conclusion for the hypothesis in (a) if 0: 2 0.05. Interpret your pvalue from (b) in terms of the problem. What does including an interaction term suggest about the relationship between price, total distance, and fuel type? Explain
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