Suppose that a compact car has a 2.0 liter engine with 4 cylinders and uses premium fuel. Calculated the expected fuel efficiency of the car. How would you interpret the coefficient of “Large”? Which independent variables are significant at the 5% level and why? Calculate the missing R2 and comment on the goodness of fit. What is the 95% confidence interval for the coefficient of Displacement?
- The U.S. Department of Energy’s Fuel Economy Guide provides fuel efficiency data for cars and trucks. The following regression output was obtained for a sample of 45 cars. The variable of interest is highway miles per gallon (Hwy MPG). The independent variables used in the analysis are as follows:
The class of the vehicle: Compact, Midsize or Large. Midsize = 1 if the car is a midsize, 0 otherwise. Similarly, Large = 1 if it is a large car, 0 otherwise.
Displcement: The engine displacement (size) in liters
Premium: Equals 1 if premium fuel is used, 0 if regular fuel is used
Cylinders: Number of cylinders
Regression Statistics |
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Multiple R |
0.90 |
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R Square |
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Adjusted R Square |
0.79 |
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Standard Error |
1.78 |
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Observations |
45 |
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ANOVA |
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df |
SS |
MS |
F |
Significance F |
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Regression |
5 |
536.75 |
107.35 |
33.85 |
0.00 |
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Residual |
39 |
123.70 |
3.17 |
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Total |
44 |
660.44 |
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Coefficients |
Standard Error |
t Stat |
P-value |
Lower 95% |
Upper 95% |
Intercept |
28.40 |
1.26 |
22.48 |
0.00 |
25.85 |
30.96 |
Displacement |
0.30 |
0.70 |
0.43 |
0.67 |
-1.12 |
1.71 |
Cylinders |
-0.94 |
0.39 |
-2.40 |
0.02 |
-1.74 |
-0.15 |
Midsize |
4.92 |
0.78 |
6.33 |
0.00 |
3.35 |
6.49 |
Large |
1.88 |
0.75 |
2.51 |
0.02 |
0.37 |
3.40 |
Premium |
-0.79 |
0.60 |
-1.33 |
0.19 |
-2.00 |
0.41 |
- Suppose that a compact car has a 2.0 liter engine with 4 cylinders and uses premium fuel. Calculated the expected fuel efficiency of the car.
- How would you interpret the coefficient of “Large”?
- Which independent variables are significant at the 5% level and why?
- Calculate the missing R2 and comment on the goodness of fit.
- What is the 95% confidence interval for the coefficient of Displacement?
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