Instruction 13.39
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, number of city blocks to the centre of the university, and one of the three jurisdictions: on campus, in the CBD and off campus, or outside of the CBD and off campus. The population regression model hypothesised is:
Yi = α + β1x1i + β2x2i + β3x2i + εi
Where
Y is the meter price
x1 is the number of blocks to the centre of the university
x2 is a dummy variable that takes the value 1 if the meter is located in the CBD and off campus and the value 0 otherwise
x3 is a dummy variable that takes the value 1 if the meter is located outside of the CBD and off campus, and the value 0 otherwise
The following Excel results are obtained.
-Referring to Instruction 13.39,what is the correct interpretation for the estimated coefficient for x2?
A) Holding the effect of the other independent variables constant, the estimated mean difference in costs between parking on campus, and parking outside of the CBD and off campus is $0.24 per hour.
B) Holding the effect of the other independent variables constant, the estimated mean difference in costs between parking in the CBD and off campus, and parking on campus is $0.24 per hour.
C) Holding the effect of the other independent variables constant, the estimated mean difference in costs between parking in the CBD and off campus, and parking either outside of the CBD and off campus or on campus is $0.24 per hour.
D) Holding the effect of the other independent variables constant, the estimated mean difference in costs between parking in the CBD and off campus, and parking outside of the CBD and off campus is $0.24 per hour.
Correct Answer:
Verified
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