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Spring 2021 - Final

The document contains a sample exam with 4 multiple choice questions related to regression analysis. Question 1 asks about interpreting coefficients from a simple linear regression model. Question 2 asks about interpreting output from a regression of test scores on student-teacher ratios. Question 3 adds computers per student as a second explanatory variable and asks about omitted variable bias.

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34 views2 pages

Spring 2021 - Final

The document contains a sample exam with 4 multiple choice questions related to regression analysis. Question 1 asks about interpreting coefficients from a simple linear regression model. Question 2 asks about interpreting output from a regression of test scores on student-teacher ratios. Question 3 adds computers per student as a second explanatory variable and asks about omitted variable bias.

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Bus 173 Final Exam

Question 1

For a sample of 306 students in a basic business communications course, the sample regression
line

y = 58.813 + 0.2875x was obtained.

Here

y = final student score at the end of the course

x = score on a diagnostic writing skills test given at the beginning of the course

The coefficient of determination was 0.1158 and the estimated standard deviation of the
estimator of the slope of population regression line was 0.04566.

a) State the population regression model.


b) Define and interpret the estimates of the regression equation.
c) What is the average final score of a student who obtained 50 in his diagnostic writing test?
d) What will be the change in final score of a student if he obtains 2 extra points in the writing
test?

Question 2

A PhD candidate wants to investigate the relationship between class size and performance of
students. For the purpose of this research, he used California Standardized Testing and Reporting
data set which you can find in Canvas. Refer to the data description pdf to know more about the
data set and variables. After the initial analysis of the variables, he regressed test score on
student-teacher ratio. The output is shown below.

. reg testscr str

Source SS df MS Number of obs = 420


F( 1, 418) = 22.58
Model 7794.11004 1 7794.11004 Prob > F = 0.0000
Residual 144315.484 418 345.252353 R-squared = 0.0512
Adj R-squared = 0.0490
Total 152109.594 419 363.030056 Root MSE = 18.581

testscr Coef. Std. Err. t P>|t| [95% Conf. Interval]

str -2.279808 .4798256 -4.75 0.000 -3.22298 -1.336637


_cons 698.933 9.467491 73.82 0.000 680.3231 717.5428
STR: STUDENT TEACHER RATIO (ENRL_TOT/TEACHERS)
TESTSCR: AVG TEST SCORE (= (READ_SCR+MATH_SCR)/2 )

a) Show that the R-squared is 5.12%.


b) Interpret the coefficient of determination.
c) Test the null hypothesis that the slope of the population regression line is 0 against a two
sided alternative. Use 5% significance level.
d) How can you improve this model?

Question 3

After identifying other determinants of test score, the PhD candidate in question 2, decided to
add one more explanatory variable in the regression analysis. This variable was computers per
student, comp_stu.

. reg testscr str comp_stu

Source SS df MS Number of obs = 420


F( 2, 417) = 22.12
Model 14592.3931 2 7296.19654 Prob > F = 0.0000
Residual 137517.201 417 329.777459 R-squared = 0.0959
Adj R-squared = 0.0916
Total 152109.594 419 363.030056 Root MSE = 18.16

testscr Coef. Std. Err. t P>|t| [95% Conf. Interval]

str -1.592806 .4927555 -3.23 0.001 -2.5614 -.6242116


comp_stu 65.15992 14.3513 4.54 0.000 36.95 93.36984
_cons 676.583 10.4808 64.55 0.000 655.9812 697.1847

COMP_STU: COMPUTERS PER STUDENT ( = COMPUTER/ENRL_TOT)

a) Do you think the model in question 2 is suffering from Omitted Variable Bias (OVB)?
b) What is the direction of the bias?
c) State the conditions of OVB.
d) Interpret the coefficient of determination.

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