TABLE 13-6
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y). To provide its customers with information on that matter, a large real estate firm used the following four variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (X1), the amount of insulation in inches (X2), the number of windows in the house (X3), and the age of the furnace in years (X4). Given below are the Microsoft Excel outputs of two regression models.

-In calculating the standard error of the estimate, SYX = , there are n-k-1 degrees of freedom, where n is the sample size and k represents the number of independent variables in the model.

Question

TABLE 13-6
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y). To provide its customers with information on that matter, a large real estate firm used the following four variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (X1), the amount of insulation in inches (X2), the number of windows in the house (X3), and the age of the furnace in years (X4). Given below are the Microsoft Excel outputs of two regression models.

-In calculating the standard error of the estimate, SYX =  , there are n-k-1 degrees of freedom, where n is the sample size and k represents the number of independent variables in the model.

Quizplus · Accepted Answer

This is true as the standard error of the estimate (SYX) takes into account the difference between the predicted values and the actual values in the sample, and has n-k-1 degrees of freedom.

TABLE 13-6 One of the Most Common Questions of Prospective House Buyers