
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN: 9780079039897
Author: Carter
Publisher: McGraw Hill
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Transcribed Image Text:Sure! Here's the transcription of the text from the image:
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1. ☐ Yes, because it is expected that as the *safety rating* increases then the *cost* should decrease.
2. ☐ No, because it is expected that as the *safety rating* increases then the *cost* should also increase.
3. ☐ Yes, because it is expected that as the *safety rating* increases then the *cost* should also increase.
4. ☐ No, because it is expected that as the *safety rating* increases then the *cost* should decrease.
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Transcribed Image Text:**Transcription: Educational Context**
Consider the following computer output from a multiple regression analysis relating the cost of car insurance to the variables: number of car accidents, driver's credit score, and safety rating of the car.
| Coefficients | Coefficients | Standard Error | t Stat | P-value |
|------------------|--------------|----------------|--------|---------|
| Intercept | 1186 | 123.87 | 9.575 | 0.0000 |
| Car Accidents (In last 3 years) | 213.48 | 21.89 | 9.752 | 0.0000 |
| Credit Score | -130.46 | 14.26 | -9.149 | 0.0000 |
| Safety Rating | 294.11 | 356.37 | 0.825 | 0.4128 |
**Explanation of Coefficients Table:**
- **Intercept**: The baseline cost of insurance is represented by the intercept, which is 1186. This is the estimated cost when all other variables are zero.
- **Car Accidents**: For each additional car accident in the last three years, the cost of insurance increases by 213.48. The small P-value (0.0000) indicates this is a statistically significant predictor.
- **Credit Score**: A higher credit score is associated with a decrease in insurance costs, as shown by the coefficient of -130.46. This predictor is statistically significant with a P-value of 0.0000.
- **Safety Rating**: While a higher safety rating shows an increase in cost by 294.11, this factor is not statistically significant given the P-value of 0.4128.
**Question for Learners:**
Does the sign of the coefficient for the variable safety rating make sense? Reflect on why a higher safety rating might not be expected to increase costs and whether this result could be due to statistical variance or model specification issues.
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