Graded Homework 23
You have submitted this Homework 2 times (including this time).
You may submit this Homework a total of 40 times and receive full credit.
This homework covers qualitative (or indicator, or dummy) variables, material that
can be found in your course packet on pages 114115.
Question #1
Suppose you want to develop a model to predict pizza consumption for students at
the University of Illinois. You have collected data from 100 different U of I students
on the amount of money they spent on pizza (measured in dollars) in one semester,
their income (measured in dollars), whether they live in a dorm or an apartment
(dorm=1, not dorm=0), and how much time they spend in the library studying
(measured in hours).
Suppose you have run the appropriate regression with the correct variable as a
dummy variable, and the coefficient on the variable DORM is estimated to be 3.7564.
What is the correct interpretation of this coefficient?
(
Hint: there are 2 right answers
)
•
Holding constant the effects of income and library study time,
students living in an apartment spend $3.7564 less on pizza in a
semester than students living in dorms.
•
Holding constant the effects of income and library study time,
students living in a dorm spend $3.7564 more on pizza in a semester
than students not living in dorms.
•
Holding constant the effects of income and library study time, students
living in a dorm spend $3.7564 less on pizza in a semester than students
not living in dorms.
•
Students living in dorms spend $3.7564 less on pizza than students not
living in dorms.
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 Spring '08
 Petry
 Statistics, Regression Analysis, Statistical hypothesis testing, Household income in the United States, library study time, Silver colored

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