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 + β 1 x 1 i + β 2 x 2 i + β 3 x 2 i + ε i
Where
Y is the meter price
x 1 is the number of blocks to the centre of the university
x 2 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
x 3 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,if one is already outside of the CBD and off campus but decides to park three more blocks from the centre of the university,the estimated mean parking meter rate will
A) decrease by 0.0135.
B) decrease by 0.0139.
C) decrease by 0.0045.
D) decrease by 0.4979.

Question

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 + β 1 x 1 i + β 2 x 2 i + β 3 x 2 i + ε i 
Where
Y is the meter price
x 1 is the number of blocks to the centre of the university
x 2 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
x 3 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,if one is already outside of the CBD and off campus but decides to park three more blocks from the centre of the university,the estimated mean parking meter rate will
A) decrease by 0.0135. 
B) decrease by 0.0139. 
C) decrease by 0.0045. 
D) decrease by 0.4979.

Quizplus · Accepted Answer

From the regression equation, the coefficient for the number of blocks to the centre of the university is -0.0045. This means that for each additional block away from the centre of the university, the estimated mean parking meter rate will decrease by $0.0045. Therefore, if one decides to park three more blocks from the centre of the university, the estimated mean parking meter rate will decrease by 3 x $0.0045 = $0.0135.

Instruction 13.39 As a Project for His Business Statistics Class, a Student