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April 22, 2009
It is E370 Time!!!
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Announcements
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WarmUps Questions
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Today’s Goals: You should be able to
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accurately define and use indicator variables in a regression.
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accurately interpret the coefficient on an indicator variable.
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explain how simple regression is related to multiple regression.
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interpret regression output for a multiple regression.
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accurately interpret Adjusted R
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Next Time~~Tests and Predictions
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Announcements
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Homework Manager Question #3: Required part ‘a’: Eyeball the data and
estimate a regression line.
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In#7, there is a column in the table for requirement three asking you to
calculate the VIF, something we do not teach.
The values to enter in this
column are posted.
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My advice is to do all calculations using Excelwithout any roundingand
you will have no difficulty getting your answers accepted.
Y' =  260 + 3867X
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0.05
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0.25
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0.35
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Carat Weight
Price ($)
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A regression of price (in dollars) on carat weight (in grams) of 48 diamonds from
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 Winter '09
 STAFF
 Economics

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