TABLE 14-12 As a project for his business statistics class, a student examined the factors that determined parking meter rates throughout the campus area. Data were collected for the price per hour of parking, blocks to the quadrangle, and one of the three jurisdictions: on campus, in downtown and off campus, or outside of downtown and off campus. The population regression model hypothesized is Y i = α + β 1 X 1 i + β 2 X 2 i + β 3 X 3 i + ε where Y is the meter price X 1 is the number of blocks to the quad X 2 is a dummy variable that takes the value 1 if the meter is located in downtown and off campus and the value 0 otherwise X 3 is a dummy variable that takes the value 1 if the meter is located outside of downtown and off campus, and the value 0 otherwise The following Excel results are obtained. -Referring to Table 14-12, what is the correct interpretation for the estimated coefficient for x₂? A) All else equal, the estimated mean difference in costs between parking on campus, and parking outside of downtown and off campus is -$0.24 per hour. B) All else equal, the estimated mean difference in costs between parking in downtown and off campus, and parking on campus is -$0.24 per hour. C) All else equal, the estimated mean difference in costs between parking in downtown and off campus, and parking outside of downtown and off campus is -$0.24 per hour. D) All else equal, the estimated mean difference in costs between parking in downtown and off campus, and parking either outside of downtown and off campus or on campus is -$0.24 per hour.

Question

Quizplus · Accepted Answer

The estimated coefficient for x₂ is -0.24. This means that on average, parking in downtown and off campus is estimated to be $0.24 cheaper per hour than parking on campus, holding the number of blocks to the quad and whether the meter is located outside of downtown and off campus constant. Therefore, option B is the correct interpretation. Option A is incorrect because it compares parking on campus to parking outside of downtown and off campus, not specifically to parking in downtown and off campus. Option C is incorrect because it compares parking in downtown and off campus to parking outside of downtown and off campus, not specifically to parking on campus. Option D is incorrect because it mixes the comparison between parking in downtown and off campus to both outside of downtown and off campus and on campus, which is not what the coefficient represents.

TABLE 14-12 As a Project for His Business Statistics Class, a Student