Homework 19
Question #1
You worked as an intern at We Always Win Car Insurance Company last summer and noticed
that individual car insurance premium depended very much on the age of the individual, the
number of traffic tickets received by the individual and the population density of the city in
which the individual lived.
To see if your conjecture is correct, you collected the following EXCEL
data set
.
In EXCEL, run a regression of insurance premium in dollars per month of an individual (RATE)
on age of the individual in years (AGE), number of tickets received by the individuals
(TICKETS) and the population density in hundreds of persons per square mile in which the
individual lived (DENSITY).
From the regression output,
.604292353 = 0.604292353
of the total variability in insurance
premium could be explained by AGE, TICKET and DENSITY. Also the coefficient of
determination adjusted for the degrees of freedom is
.496372086 = 0.496372086
, the standard
error of the equation is
46.612873
, the estimated average change in insurance premium for
every
ten
additional tickets received is
367.8352132
dollars per month, while the estimated
average change in insurance premium for every
five
additional years of age is
7.018193488
dollars per month.
You received a raw score of 100% on this question.
Question #2
You decided to predict gasoline prices in different cities and towns in the United States for your
modelling project. Your dependent variable is price of gasoline per gallon and your independent
variables are per capita income (in dollars), number of firms manufacturing parts of automobiles
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 Spring '08
 Petry
 Regression Analysis, regression model, insurance premium

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